Column for May 10, 2012

I read in last week’s “The Selma News” right on the front page that former Mayor Charles Hester has publicly said that the town should not cut its electric rates and instead should take those funds and construct a building on speculation in its new industrial park.  The idea was to attract industry to come to Selma by showing that we are serious about new tenants and have a move-in ready facility.  Mr. Hester has long championed the idea of increasing the town’s tax base.  On that, he and I are in total agreement.  We just differ vastly on how to accomplish that end.

It all comes down to the idea of the proper role of government.  I am much more of a free market person, believing that if there is a place in the market for something, then business will make it happen because of the motivation of profit.  That has been the driving force behind the capitalist system for centuries and has made America the most powerful nation on earth.

I am fully in support of the current Selma Town Council and mayor lowering the electricity rates that Selma charges.  Ever since I moved to Selma ten years ago, I have lamented the high utility rates.  Towns that participate in Electricities or are “public power communities” do their communities a disservice with higher than necessary electric rates for the sole purpose of extracting more revenue from their citizens.  I wrote some time ago (June 9th of last year) about how my electricity bill that month was almost exactly $100 higher than the rate I would have been charged had I bought my electricity straight from Progress Energy.  That $100 should by all rights be considered taxation.  Since the only method of receiving revenue by a government is by extracting it from its population, then a cut in the profits from the retail sale of electricity in Selma must equate to a tax cut.  A 3.5% rate cut for individuals or a 2% cut for businesses is not a big cut, but it is a start.

The former mayor is a real estate developer, so he is going to view town progress and purpose through that lens.  I could do the same with a background in both media and safety and take a great interest in seeing those aspects of the economy take the foremost position in my thoughts.   However, it is best to take the general welfare of the town into consideration.  That means protecting citizens and businesses from undue taxation and excessive costs of doing business.

I have spoken to a good many residents and some business owners in town.  One thing that is a common thread with them all is the high utility cost burden on their budgets.  Personally, I had one of the highest utility bills ever just a month or two ago, and it was a difficult with which to cope.  I have seen businesses have to shut down parts of their buildings and totally turn off their air conditioning systems just to be able to afford the confiscatory utility bills the town charges.  I don’t care if other public power towns charge slightly more than we do.  That does not negate the fact that our rates are still far above the fair market value.  If a private utility company charges $x, then that is fair market value.  If our town charges $x + $y, then y = taxation that is above the fair market value.

I have read the town charter and even the state statutes governing towns.  I do not see anywhere the purpose of government being to engage in speculative real estate development at the expense of the town’s captive utility customers or even property tax payers.  It is the purpose of government, however, to attempt to create an environment in which a capitalist economy can thrive.  Low utility costs, low taxes, good infrastructure, and less government regulation will do more to bring in business and residents than any edifice built for real estate speculation.   When the town brought Sysco to town, Selma was not sufficiently attractive enough to bring its vice president or employees to town as promised.  Why would anyone think that having a building that may or may not be sufficient for a potential industrial tenant would do any better?

To keep high utility taxation high or even borrowing to dabble in real estate speculation will not be the key to our future.  This was understood by James Madison when he wrote to Thomas Jefferson on February 4, 1790.  "All that seems indispensible in stating the account between the dead and the living, is to see that the debts against the latter do not exceed the advances made by the former."  Madison understood the purpose of government.  Keeping excessive burdens of taxation via utility costs for us now or in the future is not it.