Archive for July, 2014

Notes from the Highway Needs legislative hearing in Aberdeen

July 28, 2014 5 comments
Over-capacity crowd attending the Highway Needs hearing in Aberdeen on 7/2/14. Photo by Ken Santema.

Over-capacity crowd attending the Highway Needs hearing in Aberdeen on 7/2/14. Photo by Ken Santema.

On July 2nd the Highway Needs and Financing Interim Committee held a public hearing in Aberdeen, SD. This came shortly after the Governors Agricultural Summit in Deadwood, South Dakota. In the transportation issues portion of that summit Senator Vehle and two other panelists used the majority of their time to push for higher gas taxes. Fortunately this public hearing in Aberdeen went much better than the transportation portion of the Ag summit.

The crowded room of constituents and locally elected officials may be the reason Vehle was toned down in his push for higher taxes. I heard from more than one participant that they had been emailed and/or robocalled by special interest groups asking township board members and any other locally elected person to attend.

The Highway Needs and Financing legislative interim Committee had the four following legislators in attendance:

Highway Needs committee Members: Rep Werner, Sen Vehle, Sen White, & Sen Welke. Photo by Ken Santema.

Highway Needs committee Members: Rep Werner, Sen Vehle, Sen White, & Sen Welke. Photo by Ken Santema.

  • Representative Dick Werner, District 22 – Beadle, Kingsbury
  • Senator Mike Vehle, Committee Chair, District 20 – Aurora, Davison, Jerauld
  • Senator Jim White, District 22 – Beadle, Kingsbury
  • Senator Chuck Welke, District 2 – Brown, Clark, Hamlin, Spink

Each committee member kept their opening comments brief, as to allow for more public input. Vehle spent some time pining about the potential loss of the federal highway trust fund. He also mentioned the reason SD roads are currently in as good of shape as they are is due to the $183 million received in federal stimulus funds. Vehle also seemed to be quite mad that Congress has to offset any federal dollars going to transportation that comes from the general fund. It was ironic watching a Republican Senator in the SD State Legislature bemoaning one of the few victories gained by fiscal conservatives in DC. I guess he was correct when he said “roads are non-partisan”; elected officials from both parties want to raise taxes and spend more federal dollars on the roads.

Brown County Commissioner Mike Wiese testified at the hearing. He said the increase in fees from licenses didn’t work. Going back in history he pointed to the removal of the personal property tax (commonly known as the liars tax) in South Dakota as a loss of revenue for the counties. Then in the 90’s the state came up with a method to fund schools that further capped the amount of revenue a county could collect. Weisse says the increased fees from licenses was little more than SD making good on a promise to fund roads. But that promise has only restored some lost revenue to the counties, and not allowed the counties to collect the revenue needed to maintain or improve roads. I’ve spoken with Wiese on this issue before. He does make a strong case that counties have been squeezed. Yet at the same time I’ve seen some pork in the County budget that could be trimmed…

Brown County  highway superintendent Dirk Rogers testified later in the hearing. He had a lot to say, and it was all well worth listening to. A big point he made was that oftentimes receiving federal dollars on a transportation project would actually hurt the county. The requirements placed on such projects by the federal government often raise the cost of doing the project to a large extent. He said often the money received from the federal government only covers the additional costs to the project that were caused by the federal requirements. If the county does the project without the federal government involved it would be done much cheaper; and often much better quality because it is local experts used.

Rogers also noted that Brown County has 480 miles of asphalt on county roads. About a hundred miles of these asphalt roads were in fact a ‘gift’ from the state when the new State Highways were made. Many of the county’s asphalt roads connect with gravel roads at the county line. With so much road to deal with (gravel and asphalt) Brown County has decided to make one road leading into each community non-posted. That allows the county to focus on getting each town having a road that can handle modern farm transportation needs. Of course that also means something will need to be done with other county roads. Rogers didn’t really say what should be done with them. Personally I think it is time to grind up all the non-necessary asphalt and/or get rid of some unnecessary portions of road altogether.

Earlier in this post I said Vehle was on much better behavior in this meeting than he was during the Ag Summit. Yet he did have a “I told you so” smirk on his face when Marshall County Commissioner Paul Symens said a use tax is the fairest way to get transportation revenue and the fuel tax needs to be increased. Symens did mention one point I felt sometimes gets overlooked in this discussion. Many people (including myself) say its time to replace bridges with culverts. But as Symens notes, this is not a good solution for all instances. Culverts can replace a lot of bridges. But some locations would simply wash out a culvert after a few years. I think the answer it to determine which bridges can be safely replaced with culverts and start there. That will leave far fewer bridges for the counties to maintain.

When Brown County Commissioner Duane Sutton testified he focused on the fact counties have few ways to raise revenue. He state opt-outs don’t work in Brown County. I agree with Sutton; mostly because the residents of Aberdeen don’t want to pay more in taxes to build bigger roads for rich farmers (I’ve heard that statement often in recent years from Aberdeen residents). Sutton wishes they would have tied the nickel tax in the 90’s with inflation. He also wants the legislature in Pierre to create more local options for counties to raise revenue. He said it would then be the Commissioners taking heat for tax hikes, and not the legislature. Another area Sutton mentioned was a half-cent sales tax increase in South Dakota that would go directly to highway funding. Finally Sutton said an option is to pass more highway cost on to vacationers. This mirrored a proposal from Vehle earlier. I think that is a misguided plan. Tourism is not what I see tearing up county roads. What I see tearing up county roads is agricultural equipment.

A farmer from the Hecla Township said the townships get very little money to deal with their road problems. He also highlighted the fact that drainage issues have to be worked out before roads can be fixed. And along those lines, some of the regulations from the Clean Water Act (CWA) have increased the costs of putting in culverts. The CWA regulations have priced culverts out of range for townships to be able to handle financially. This is another example of federal intervention making it hard for local governments to maintain roads.

A landowner mentioned that the county posting roads has put more traffic on township roads. This has caused the township roads to deteriorate faster than they would otherwise. This landowner also mentioned a tax on every wheel for a truck or trailer would help raise more revenue. That is an idea I heard mirrored a few times throughout the meeting.

A former Commissioner from Dickey County, ND, mentioned SD is doing much better than ND about posted roads. A study had been done a while back showing that SD farmers are more complaint with keeping off the roads when weight restrictions are enacted. This talking point seemed to be aimed at Sen Vehle. Many times up to this Vehle had tried to get testifiers to say farmers are using the roads too often when they are posted. Personally I work with a lot of farmers in the Brown County area; and I know more than a few that have lost money because they couldn’t bring their product to market because of posted roads. They didn’t take their goods to market at the best time because they followed the post and wish to keep the roads in good shape. There are some exceptions to this, but overall I think farmers have been pretty complaint.

Mike Jung spoke for a few minutes. He said a combination of solutions is needed so it doesn’t put too much burden on one area of taxation. He would like any solution to be tied with inflationary increases.

A representative from the SD Association of Towns and Townships spoke for a few minutes. He said the average township in South Dakota has about thirty-five miles of road. He also promoted the 1/2 cent sales tax increase if it went to transportation. He promoted a small tax on dyed diesel. Finally he promoted the increase of the wheel tax, and said some of the extra revenue should go directly to townships. There didn’t seem be a tax he doesn’t want to raise. He also mentioned many farmers and landowners would willingly do snow removal and culvert replacements by their land; but liability issues keep that from happening. I would say that perhaps its time to allow local landowners to actually participate in infrastructure maintenance and improvements.

The finance officer from Groton wants a full cent sales tax increase. Further, she said the farmers should pay commercial prices for licenses. I agree with her second recommendation. Farming is a business. All businesses should be treated equally.

A Day county resident had a different idea for raising more revenue. He thinks the wheel tax should be based upon the amount of grain hauled. I’m not sure about that one. It sounds good in theory, but in reality I’m not sure such a system would work.

Overall it was an interesting evening of testimony. There seemed to a consensus that counties and townships need more revenue. The main question is how to get that revenue. A sales-tax increase seemed to be mentioned the most, followed by an increase in the fuel tax. No matter what, it seemed the majority think more of the ‘new’ revenue should go directly to counties and townships.

Personally I am opposed to any tax increases. However, if these local tax increases mean removing our reliance upon the federal government then I would be for it. If South Dakota resisted accepting money from the Federal Highway Trust Fund it would allow us to maintain our infrastructure at a fraction of the cost it does now. Such a move would also allow us as a state to show the Federal government is not needed for South Dakota to survive. The State of South Dakota has plenty of revenue currently to deal with its roads. The question though is whether the big spending legislators in Pierre are willing to give up their pork projects and focus on infrastructure. I somehow doubt that will happen. Just this year Governor Daugaard threw $30 million at ‘economic development’. That money would have been better spent on infrastructure and education. Maybe in his second term Daugaard will focus on infrastructure development, and forget about the corporate welfare he currently promotes in the name of economic development.

High corporate taxes cause Inversions

July 28, 2014 2 comments

A huge political talking point used by both sides of the aisle in recent years is corporate inversions. Corporate inversion (also known as corporate tax inversions) occur when a company relocates its headquarters into a country that has dramatically lower tax rates than the companies country of origin. The companies that do this generally are competing in the global market. Being headquartered in a country with a much higher tax rate gives companies a serious disadvantage in the market. If the US is serious about reducing the amount of corporations going to other countries then something needs to be done about the corporate tax rate.

I know what some people will say: “but corporations aren’t paying their fair share”. KMPG has provided a nice table showing the corporate tax rates between 2006 and 2014  of 134 countries and average rates for regions. In this table the United States has the second highest corporate tax rate with 40%. The only country higher is the United Arab Emirates (UAE); but it should be noted the 55% tax rate in the UAE only applies to Oil Companies. Ireland is a country many US companies have chosen when deciding to go overseas. In Ireland the corporate tax rate is 12.5%. That is a huge drop from 40% that US headquartered companies must be crippled with.

Over at CATO the chart below was shared by Chris Edwards:

Chart Source: CATO

Chart Source: CATO

Looking at this chart comparing the United States corporate income tax rates to other regions shows how disadvantaged our businesses are in the global market. Even in North America the US is at a disadvantage. Canada has a corporate tax rate of 26.5% and Mexico has a corporate tax rate of 30%. In the global market the US can’t even be competitive with its two neighbors.

Another talking point brought up often is “all of these corporations get special tax breaks, so they really aren’t paying their fair share”. I would agree with that statement. Personally I would rather get rid of all corporate taxes… but since that isn’t likely to happen anytime soon I think the corporate tax should be flattened. The current corporate income tax system in the US is nothing but income redistribution done at the corporate level. Republican and Democrat politicians have worked for decades to get special tax deductions and tax credits for their favored businesses or industries. That has made it hard for small businesses, which are disadvantaged with paying the full 40% while their large competitors have bought tax breaks in DC. The same disadvantage that US companies have on the global level is shared by corporations within the US if they are not connected to DC politicians.

If the US is serious about ending corporate inversion the current tax rates must be lowered. Unfortunately that isn’t likely to happen any time soon. Too many people think corporations aren’t taxed enough and too many politicians have been bought by big business to provide special tax breaks. In such an environment it is unlikely anyone will look at the obvious answer: cut corporate taxes to a flat rate with no special deductions.

Rounds debate schedule mirrors Daugaards

July 25, 2014 13 comments
Republican US Senate Candidate Mike Rounds speaking in Huron. Photo by Ken Santema

Republican US Senate Candidate Mike Rounds speaking in Huron. Photo by Ken Santema

About a month ago I mentioned that Rounds and Daugaard were already trying to minimize their unscripted exposure to voters. At that time Daugaard had mentioned he would schedule four Gubernatorial debates: DakotaFest, SD State Fair, KELO, and SDPB-TV. A simple copy/paste could show the same schedule just announced by Rounds for the US Senate debates: DakotaFest, SD State Fair, KELO, and SDPB-TV.

Here are the ‘details’ from the Rounds announcement:

Dakota Fest
August 20, 2:00pm

South Dakota State Fair
August 29, 10:00-11:00am

South Dakota Public Broadcasting
October 23, 8:00-9:00pm

Keloland News
October 29, 7:00-8:00pm
Sioux Falls

I covered most of my thoughts on this topic in the earlier post. But I would like to add one more thought: we the voters should refrain from voting for any candidate that outright avoids debates or town hall events. I know of at least a half-dozen other events that are being planned over the next few months which hope to host a US Senate debate. Pressler has just accepted an invitation to debate by the Native Sun News and United Tribes Technical College. These other events are likely less controlled than the four accepted by Rounds. What this basically means is these other ‘smaller’ debates give voters a chance to hear candidates talk on a variety of issues they might not otherwise get to hear from a candidate.

In my mind Rounds is on the ‘not worthy of a vote’ list simply because of his campaign’s effort to avoid talking unscripted. To anyone saying “well he’s the front-runner so he would be crazy to debate” I would ask a question: Did you feel the same way when someone of the other party was the front-runner? The need for more debates has nothing to do with parties. It has to do with getting as much information to voters as possible. When front-runners decide to limit debates they also have decided voters are not worthy of more information. Thus my statement saying candidates wishing to limit debates are not worthy of votes.

Remy inspires a taxman Playlist

July 25, 2014 Comments off

Remy has released another great music video. This time he takes on the coincidence involved in the multitude of IRS agents that had failed hard drives during the period of time Congress needs to review emails. Here is the video Remy released a few days ago:

Yeah… Concidental.

Speaking of coincidence. Back in 1973 President Nixon was taking some heat from the press for ‘accidentally’ deleting about eighteen and a half minutes of a tape audio recording from the White House. Coincidentally the 1967 hit protest song from Arlo Guthrie was about that long.

Now for this weeks playlist. This playlist has been inspired by the ‘taxman’.

The Beatles – Taxman

This classic song sums up the mentality of the taxman. “If you take a walk, I’ll tax your feet”.

Cheap Trick – Taxman, Mr. Thief

Moving on to a little bit harder classic rock, but still focusing on the taxman, is Cheap Trick. “You work hard, you went hungry, Now the taxman is out to get you.”

The Replacements – Bastards of the Young

This song highlights how the Gen-Xers were little more than an income tax deduction. I believe that is even more true for the millennials. Leave it up to a progressive tax code to completely twist the reason for having kids. “income tax deduction, what a helluva function.”

Lucky Dube – Taxman 

OK, back to talking about the taxman. The great Reggae start Lucky Dube created this song asking what good the taxman is. “You take from the rich, take from the poor”.

The Kinks – Sunny Afternoon

Time to finish this playlist with one of my favorite groups. This song highlights the consequences of dealing with the taxman.

Categories: IRS Tags: ,

Some thoughts about Weiland’s town hall in Aberdeen

July 22, 2014 2 comments
Democrat US Senate Candidate Rick Weiland speaking in Aberdeen, SD. Photo by Ken Santema

Democrat US Senate Candidate Rick Weiland speaking in Aberdeen, SD. Photo by Ken Santema

Today Democrat US Senate Candidate Rick Weiland held a town hall meeting in Aberdeen. In this post I will look at some of what Weiland had to say during the event. Most of this will be passing on what he says; then I will add my thoughts about his stances. I was happy to see a fairly good attendance, most events of this type rarely seem to get over a handful.

Weiland began the event talking about traveling to all the towns in South Dakota. No matter how I feel about him on issues, I respect the heck out of Rick for having made the effort to hit every town in South Dakota, especially the small ones. Just today on the way to Aberdeen he stopped in the following towns to meet with people: Esteline, Clark, Redfield, Mellette, and Warner. Weiland got more than a few nods in agreement from the audience by using his line about campaigning in Dallas, SD, while Rounds was seeking special interest money in Dallas, TX.

Traveling during this campaign has given Weiland a chance to answer questions about Obamacare. It has also given him a the chance to promote his solution for healthcare. Weiland has not been a fan of Obamacare because it mandates people buy private insurance from big corporations. Instead Weiland wants to provide an option that would allow anyone to buy into Medicare. By doing so, says Weiland, the prices of insurance would drop and people would not have to deal solely with insurance companies. I really don’t like his option. But it is an interesting approach that fits well into his populist campaign. I think his proposal might do well in front of the masses.

Weiland says he got into politics because “big money is writing public policy”. He called out the healthcare industry in particular. Obamacare forces people to buy private insurance from the healthcare industry. Another example he brought up was Ag. He was amazed to find out 75% of farm programs go to the top producers in the US. None of those top producers live in SD as far as he knows. These are two issues I agree with him on. We may have different solutions, but it is refreshing to see US Senate candidates that sees the problems with big health and big ag in politics.

He kept his main speech very short, so as to allow more time for QA. Here are some quick bullet points of other things Weiland mentioned during his speech:

  • Weiland said the current VA scandals would be a non-issue if the VA had been funded properly.
  • Weiland said his “take it back” slogan is about taking the country back from billionaires and corporations.
  • Weiland believes investing in head start now will save the country money in the future.
  • He can’t wait to debate.
  • He believes that South Dakota refusing to expand Medicaid “unconscionable” and “unforgivable”
  • He also said his campaign was about “spreading the truth from my perspective”. I actually liked that line. It addresses a problem I’ve had with him in the past. A year ago I didn’t really feel he listened to other perspectives. Now he seems more focused on hearing all perspectives, including those he disagrees with. Maybe I was wrongly harsh on him earlier today.

The first question of the town hall asked how partisan Weiland will be. That is a question I was interested in. Basically will he do whatever Senator Reid tells him to do? Weiland says his job as a Senator would be to vote in the best interest of the State. Weiland focused on the fact that he is not beholden to special interest groups. Not being beholden to special interest groups leaves him the freedom to vote on behalf of constituents. He went on to mention that Rounds has spent more time trying to get money visiting Texas; while Weiland has actually been visiting every South Dakota town and plans to keep doing so if he is elected to office. To finish off this question Weiland described himself as an “Independent Democrat” that isn’t afraid to go against the party or big money when it is the right thing to do.

The topic of debates was mentioned. Weiland is willing to attend all debates, whether or not Rounds commits. He believes debates should be a normal part of the political process. He would like to see a debate commission setup. This commission would have the power to require candidates participate in debates and the media would be required to cover the debate. This is an issue I partly agree with him on. Candidates should be debating and the media should be covering these debates. But I don’t like the idea of a commission unless it is voluntary and doesn’t use government power to enforce its rules. I think a better option is for we the voters to simply not vote for candidates such as Rounds that feel they are above debates.

Immigration reform was of course brought up. Weiland mentioned the Senate had passed a comprehensive immigration bill last year that the House has refused to take up. He wondered if the current crisis would have been averted by its passage. I personally think the current crisis would have happened either way, but he does raise a valid question worth pondering. It was also mentioned the current law dealing with children from non-contiguous countries (immigrant kids from places other than Mexico or Canada) was signed into law by Bush. In this case Obama asking for the extra money is actually a case of the President following a law set out by the same Republicans that are attacking Obama now for following that law. I agree with Weiland’s assessment. The DC Republicans cannot simply change their stance because the President has changed hands. Weiland did say children need to be sent back, but also mentioned there may be cases where some of the children qualify for refugee status. That was the actual reason the Republicans passed the law in the first place.

Weiland then somehow got into a rant about Citizens United and McCutcheon. Just like his town hall a year ago, I still feel he is wrong on this issue. I agree big money buying legislators is a problem. But restricting free speech is not the fix to that problem. He mentioned in a later question that he fears the Supreme Court will remove all contribution limitation.

Some other items that came out of the QA from various questions:

  • Weiland thinks federal transportation spending is a good economic development program
  • Weiland says many politicians are tired of fundraising all the time.
  • Weiland wants to meet with every member of the Senate and House one on one in order to determine where they stand on issues.
  • Weiland says he has nothing against success or people doing good in business, but the system has been rigged by big corporations.
  • When talking about class warfare, Weiland mentioned that even the 1% should be outraged that the middle class is disappearing. With no middle-class, there will no longer be a 1%.
  • He was unhappy with the first Iraq war. He also made it sound like he is unhappy we are once again increasing our troops there now.

Overall I still disagree with Weiland’s campaign being focused upon curtailing free speech. But he did do much better at this town hall than the one I attended a year ago. I don’t see him getting the libertarian vote, but I do think his populist message can resonate with a lot of people if he can get in front of them with his message.

Plan to attend the Dan Kaiser for House block party on Sunday in Aberdeen

July 22, 2014 1 comment
South Dakota District 3 Representative Dan Kaiser

South Dakota District 3 Representative Dan Kaiser

This Sunday, July 27, there will be a block party and fundraiser for District 3 Representative Dan Kaiser. The event will be held from 6pm-9pm at  1415 Nicklaus Drive. The Facebook event for the block party can be found here.

The District 3 house race is going to be very competitive this year. Anyone worried about government transparency and accountability should be looking to keep Kaiser in office. As we get closer to the election I will do a full post on Dan (and other Dist 3 candidates), but for now here are some quick bullet points as to why I feel Kaiser is a good candidate to support:

  • Kaiser believes in transparency at all levels of government. Even as an elected official he believes in true transparency. Each day when the legislative session ends Dan goes on to his Facebook page and posts the results of his voting for the day. He is not afraid to let people know how he voted and why he voted that way.
  • Kaiser believes in the free market; and more importantly Kaiser believes the State Government should stay out of choosing winners and losers in the market.
  • Kaiser is committed to funding public education as set out in the South Dakota Constitution. He has not made this issue about parties, rather he has made it an issue of following the framework that legislatures are supposed to follow.
  • Kaiser actually reads the bills he is going to vote on. He is the only legislature that took the time to find out what TPP was all about when a resolution came to the floor.

I think even people that aren’t Republican can find commonality with Kaiser. I would urge everyone in the Aberdeen area stop by to show support for and/or speak with Dan on Sunday. If nothing else stop by to ask him some questions or let him know what you think.

Independent Gubernatorial candidate Mike Myers not allowed to change running-mate

July 22, 2014 11 comments
Mike Myers and Lora Hubbel at Presser in Sioux Falls. Photo from Mike Myers for Governor Facebook Page

Mike Myers and Lora Hubbel at Presser in Sioux Falls. Photo from Mike Myers for Governor Facebook Page

Over at Madville Times it has been reported by Cory Heidelberger that SD Secretary of State Jason Gant is not allowing Myers to change his running-mate on the ballot. This was a poor decision on Gants part. Originally Myers had Caitlin Collier chosen as his running-mate. But due to family issues Collier had to pull out of the race and Myers then chose Hubbel as her replacement. The letter to Hubbel from Gant can be read on Cory’s post. Basically it says because SD codified law does not allow for independent candidates to replace a Lieutenant Governor; therefore Collier has to stay on the ballot.

This was the wrong decision by Gant. Cory sums up my thoughts pretty good in his post:

I recognize the need for the secretary of state to be a stickler for rules, and Secretary Gant has demonstrated that he can be a stickler when he wants to be. But in this case, Secretary Gant is needlessly punishing Hubbel (a known bête noire among Gant’s Republican friends), Myers, and the voters. No votes have been cast. No ballots have been printed. No dispute exists over the practical facts of Collier’s withdrawal or Myers’s selection of Hubbel. No fraud has been committed by anyone in seeking to place Hubbel’s name on the ballot next to Myers’s, and no harm will be done to anyone by the stroke of the pen that would align the November ballot with reality.

According to SDCL §12-8-6, a party committee can fill vacancies that have occurred for a position that was previously nominated. The vacancy must be filled by the second Tuesday in August. There is no similar law for Independent candidates. As Gant interprets the situation Collier must stay on the ballot.

Here are the two steps I believe SOS Gant should have taken:

  1. Allowed the change of running-mate to happen. The reasoning would be for equal access to the ballot based upon 1st Amendment protections. Specifically “the right of the people…to petition the Government for a redress of grievances”. This portion of the Bill of Rights has been used in the past force election bodies into creating equal ballot access laws for all. It is also the path Gant should have chosen.
  2. Gant should then have proposed legislation for the 2015 session that would create a permanent fix in codified law. Even though Gant is gone at the end of this year, he still has some work to do. Actually he has a lot of work to do. During any downtime Gant should be reviewing the current election laws and guidelines to ensure equal access is given to the ballot by all candidates; whether or not they are part of a party.

Since Gant didn’t take the path it will now cost the state and Myers a lot of unnecessary money going to court. This from the Myers campaign on Facebook:

We’re going to take the state of South Dakota to court! We’re being treated unfairly in light of Caitlin’s personal matter. I’m not allowed to replace my running-mate, although the Democrat and Republican candidates would be able to if they were in the same situation. This is unfair and we’re going to challenge the constitutionality of Secretary Gant’s decision.

I agree with that statement completely. The Myers campaign was not asking for special treatment. They were asking for the same equal treatment that other candidates receive in the race. There isn’t much time for Myers to actually challenge Gant’s decision in court. Hopefully this situation will be used as the catalyst to actually fix many of South Dakota’s restrictive ballot access laws.

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