The Rush to Raise Taxes

By John Strand
Staff Writer
We have serious reservations about the rush to a June election for additional sales taxes to pay for a flood diversion.

Just so you know, sales taxes are generally regressive in nature. They burden poor people disproportionately. They don’t have to, but unless we speak up now and voice those concerns, it will be too late.

A year ago, under the emotional surge of having just staved off historic flood levels, a small number of folks voted in a $200 million, 20-year, one-half cent sales tax in an off-year, low-turnout June election. Each yes vote was worth the equivalent of $20,000.

That was a regressive sales tax. (The combined local maximum is up to $50 for up to a $2,500 purchase.) We were remiss for not having voiced concerns about such an approach to sales tax loudly and strongly, before the tax proposal was constructed.

But this year is different. We do have time to speak up, to voice our concerns, to participate in the discussion that shapes the sales tax proposals coming to voters, if that should happen.

For the sake of explanation, we quote from Wikipedia definitions of regressive and or progressive sales taxes:
“A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases. In simpler terms, a regressive tax imposes a greater burden (relative to resources) on the poor than on the rich — there is an inverse relationship between the tax rate and the taxpayer’s ability to pay as measured by assets, consumption, or income… Regressive taxes attempt to reduce the tax incidence of people with higher ability-to-pay, as they shift the incidence disproportionately to those with lower ability-to-pay. The opposite of a regressive tax is a progressive tax, where the tax rate increases as the amount subject to taxation increases.”

As HPR goes to press this week, it appears that Cass County officials and Fargo City officials are negotiating whether any shared or separate jurisdictional sales tax votes will be on the ballot June 8.  Over two-thirds of Cass County residents live in Fargo. Some want a countywide vote. Others want a Fargo vote only.  They have a week to place any proposal on the ballot. Both entities will likely have the topic on their Monday agendas.

Why the big rush? Some suggest it is to capitalize on current flood-fighting emotions. We are uncomfortable with a vote on ANY sales tax proposals until a thorough debate has considered ALL potential sources of funding.

Given that, we will be hard-pressed to support a regressive sales tax on top of the regressive sales tax already in place in Fargo. If there is not an attempt to tweak it so as to tax higher value purchases, we cannot give it our support. If the poorer people do not have a voice in this gargantuan $1.3 billion diversion proposal – if it does indeed go forward – we will have done them a disservice for a generation or more.

There is no doubt that the Fargo-Moorhead community needs flood protection. That is not debatable. How we do it and who pays for it is not something to be rushed to the degree that folks have it placed on the ballot with nary a week’s notice, and then voted on in a short two months time.

The state of North Dakota needs to weigh in. The same for Minnesota. There are Cass County concerns and Clay County’s as well. There is Fargo and there is Moorhead. And then there is West Fargo and all the folks who simply come and go to our community to shop.

Then there are those who live right along the river, and the rest who don’t. There are some who’ve already paid for their own flood protection, and others who have not. Some paying taxes will have absolutely no vested interest in our community. Some paying such sales taxes will sacrifice a higher basic level of their finances to such a tax, while others will get off the hook big time by paying a pittance while directly benefiting from floodwater management.

The list is endless, as you know.

We all agree on need. A regressive sales tax at the city or county level is not our recommendation at all. Nor should it be yours, we would venture to guess.
Folks better speak up now or for two decades pay the piper.
April Birthdays…

Happy April Birthdays to all the others we know celebrating this month: Jan Ellen Myrdal-Morrell, Modern Man, Aryeh Kobrinsky, Josh Costello, Pamela Sund, Tom Davies, C.T. Hanson, Becky Jones-Mahlum, Maureen Kelly-Jonason, (John Strand), Ben Hill, Matt Haney, Charlie Wilson, Steve Becker, Dan Huffman, Rick Clayburgh, James Wolberg, Vicky Larson-Neuharth, Mike Allmendinger, Nellie Bjelde, Randy Schwartz, Joyce Geddes Simmons, Scott Garmen, Paul “Spike” McDannel, Marjorie Morris, Zach Hannestad, Trevor Fortin, Melanie Robinson, Tricia Strand-Jerrich, Bob Rohla, Dick Rohla, Justin Collins, Jim Christl, Don Kadlec, Tom Hartman, Don Faulkner, Gerardo Rodriquez, Terry Hanney, Dan Hedrick, Davin Brown, Mike Williams, Kristin Helgeson, Matt Morken, Mark Campbell, Sue Berg-Anderson, Maggie Mitzel, Terri Iverson, Mike Vangsness, Mark Altenburg, Jed Bontjes, Billy Delaney, Roy Raaj, Trevor Hirst, Kara Miller, Barb Raetzman, Elise Pallais, Netty Berger, David Ideele, Pete Morsch, Tyrell Scott, Ken Disher, Scott Miller, Richard Schaan, Matt Wiener, Tommy Lund, John Maddock, Russ Quammen, Don Haney, Marty Risky.