Policy BlogThursday, October 30, 2008Nice Revenue? Yours or the City's?
My colleague, David Ross, has a virtue that has served him well: he is a pragmatist. He looks at most situations, makes a decision and moves on. It has served him well. Try as I might, I struggle with pragmatism. Instead, I am a ruminator. Don’t ask me where I picked it up or why I cannot shake it off. It is what it is – I cannot let go of things. Things that bother me hardly bring a shrug to the shoulders of some of my co-workers. Sometimes I lay awake at night or get up early because I am bothered by certain issues. For instance, this morning I climbed out of bed at 4:00 AM and came into the office because I was thinking about the upcoming elections and the way our city-owned utility charges onerous fees and taxes on gas.
I am troubled that business, after Mr. Obama’s almost certain election, will face the Employee Free Choice Act. This act – tantamount to calling nuclear weapons peace bombs – may have an easy time passing the US congress given the certainty of one party federal rule. Small businesses with as few as five employees may be affected. This Employee Free Choice Act, while portrayed as the cure to employee pay and benefits, is about building the unions’ political power and not about employee rights, pay or benefits. You will undoubtedly hear more about this issue after the November elections. I am also deeply troubled that Duluth is using the gas utility, Comfort Systems, to fund a good portion of our retiree health care problem. To do so, the City charges an onerous fee in lieu of taxes (PILOT) of 7% and they charge every customer a 1% sales tax. Recently, the Minnesota Attorney General appeared in Duluth to protest Minnesota Power’s first rate increase in over a decade, calling it “outrageous.” Senior citizens complained that such increases were unjustified. A few citizens said enough already, claiming they might even have to choose between things like medicine and paying their electric bills. Given this outrage about Minnesota Power’s rate increase, it is ironic that a private company, like Minnesota Power, has to elaborately justify its increases – increases mainly due to state legislation that the utility burn renewable fuel rather than coal - to the Minnesota Utilities Commission, at the same time, the City of Duluth can pass along optional fees and sales taxes through a simple vote of the city council. The fees and tax, while legal, are entirely optional on the city’s part. Duluth, in its budget for 2009, states that it will make $4.7M from the PILOT fee. This is almost half of what the city will make on property taxes. Where is the outrage that should accompany such things? Several months ago, I spoke to the city finance director about the PILOT fee. After a bit of cajoling about the optional nature of the fee – the city does not have to charge a PILOT fee or sales tax - her response to me what that it was “nice revenue.” I don’t fault her for such a comment. After all, her job is to make sure the trains run on time and that our bills are paid in a timely fashion. However, we should be concerned that each and every business, homeowner, or tenant be able to keep more of his or her money rather than give it to the city as “nice revenue." One city councilor is proposing a windfall profit ordinance for the PILOT fee. This kind of political charge is normally aimed at oil and gas companies. In this case, however, it is aimed at our publicly owned utility. The ordinance would make sure the city does not wildly profit from consumers. As it stands now, the city will make more money if the winter is cold and the bills are high. That means if a customer’s total bill for winter heating is $2,160.00, including fees and taxes, he or she could have paid $2,000 without such fees and taxes. The $160 savings could then be used for necessities or an extravagance of the consumer’s choice, for instance: Christmas gifts. It is not right that the city charges so much. At the Chamber FORVM on Tuesday, November 4, we’ll talk about public ownership of the gas company. We’ll address such issues and challenge guests Greg Gilbert and Todd Fedora about the fees, taxes and direction of the utility. Jim Benning, City Works Director, will also be on hand to answer technical questions about the utility. The FORVM will prove to be an interesting discussion and one that might potentially lower the heating bills in your homes and businesses. I am hoping you’ll join Linda Kratt and me as we talk about this important matter. Call me foolish, call me possessed, but just knowing that the Chamber is advocating for you, our member, makes me feel a little better. See you at the FORVM. Chamber FORVM Tuesday, November 4 8:00am – 9:00am Technology Village – Playground Theatre (first level)
posted by Andy Peterson
at
3:10 PM
|
Previous Posts:
Subscribe to |
©2012 Duluth Area Chamber of Commerce. All rights reserved.
5 West First Street, Suite 101, Duluth, MN 55802
218.722.5501 Fax: 218.722.3223
