Dakota Beacon

A February 3, 2008, Fargo Forum letter by Chuck Stebbins of Moorhead, “Community Organizer” with the “People Escaping Poverty Project” stated “The Greater Fargo Moorhead Economic Development Corporation has begun work to promote a half-cent sales tax increase to be used for economic development. What most may have forgotten is that this proposed sales tax will go on for the next 12 years, generating $114 million to try to attract high-tech, high-wage jobs to the metro area.”

Later in 2008 it was revealed that the tax was projected to raise $9.4 million by October 1, 2009 and 4% more for each of 11 years thereafter, totaling $141 million during the 12 years. Apparently Mr. Stebbins was no better at “details” than fellow “Community Organizer” President Barack Obama. He must have juxtaposed the number 141 to 114.

On May 9, 2008, the “Voter Collaborative”, a group associated with the Moorhead-based “People Escaping Poverty Project”, sponsored a debate on the campus of NDSU between two Fargo high school teams (Shanley “in favor” & Fargo North “against”) over the merits of a half-cent Cass County economic development sales tax proposed by the Greater Fargo-Moorhead Economic Development Corporation (GFMEDC). Two local area educators judged the event, ruling that the students arguing in favor of the proposed tax presented a stronger case. A subsequent straw poll solicited from about 60 people that attended the event, however, produced 29 votes opposing the tax and 14 supporting it. It should not surprise anyone that the” educator” judges found in favor of the tax nor that only about 72% of those in attendance chose to vote.

On June 10, 2008, Cass County voters rejected the sales tax increase by a vote of 63% No to 37% Yes.

Had the sales tax measure passed, initial approval of any sales tax funded proposal would have come from a nine member GFMEDC executive committee. Three banking members and two utility members of the executive committee would have held the power to approve any project they desired to without much, if any, consideration to the remaining four committee members.

A second approval would have been required from the Growth Initiative Fund (a nonprofit formed in 1992) Board. Three banking members and one utility member would have held the power to approve any project they desired without much, if any, consideration for the remaining three member of the seven member board.

Final approval would have come from the Cass County Commission. The makeup of the Cass County Commission is typical of county commissions in North Dakota. The occupations of those on the board appear to have been a housewife, an insurance agent, a retiree, a window cleaning business owner, and a board member of the Lake Agassiz Regional Development Corporation, Mr. Ken Pawluk, it must be assumed, would have been the Commission’s “point man” in convincing the Commission of the viability of a particular “project”.

Six years prior to the vote, the GFMEDC was supported by 20% pubic funds and 80% private funds. At the time of the vote, the GFMEDC, with seven staff members including a president and vice president, operated on 55% public funds and 45% private funds, even though only 21% of the board members are elected public officials.

The board of directors of the GFMEDC was revealing; only 7 elected government members, 5 members from utility companies, 4 members from banking, 4 members from education, 3 from land development, 2 from industry, 2 from distribution, 2 rural representatives, and one each from software, print media, medical, and insurance.

Land development/realty interests appear to be the most over-represented of those businesses that make up the seemingly “token” members of the two boards.

Candidate for congress, Rick Berg, served on the Board of Directors of GFMEDC from 1999 to 2007. Berg, Senior Vice President of Goldmark Schlossman Commercial Real Estate Services Inc., is also a past Chairman of GFMEDC.

Representative Berg and Governor Hoeven were strong proponents for the sales tax increase the voters dismissed almost two to one!

Government, utilities, banks, education, land development; potential powerful brokers steering the “distribution of tax revenues” derived from hard working North Dakotans…to the tune of $141 Million over twelve years. Voters beware…this is not the last you will hear of these “economic development schemes”. Keep your “no new taxes” signs at the ready!

Brett Narloch, Executive Director of the North Dakota Policy Council, on May 19, 2008 reminded us all of the words of Thomas Paine, author of Common Sense:

“We still find the greedy hand of government thrusting itself into every corner and crevice of industry, and grasping at the spoil of the multitude… It watches prosperity as its prey and permits none to escape without a tribute.”

I have my own take on “taxes for economic development”: “We need to wake up and realize that government does not create economic prosperity; instead, it feeds off of it like a hungry eagle!”