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.
Showing posts with label public power. Show all posts
Showing posts with label public power. Show all posts
Wednesday, May 09, 2012
Thursday, September 29, 2011
Column for September 29, 2011
When will these people get it? Liberal tax and spend Democrats (and even some Republicans) don’t know what the word, “NO!” means or understand basic economics. I was reading a news story about a North Carolina State Legislator who wants to bring back a one cent sales tax increase for us citizens to pay. It did not take long to comprehend why it is being proposed again. Bill Faison is a state representative from near Berkley East, meaning liberal Orange County.
The plan that he has been pitching is to reinstate a one penny (1%) sales tax hike to fund state jobs that have recently been cut. His wants to rehire over 6,400 state employees that were laid off because of budget cuts. His claim is that the tax hike would bring in over a billion dollars a year. His slogan is “Give a penny, hire a state worker.” I will admit that a one cent sales tax would be nearly invisible to the average shopper. When I go to Wal-Mart and spend a few hundred dollars, I may never notice the increase in the tax. However, over a year’s course of time, that one penny sales tax hike adds up.
Several things occurred to me as I read the news story. First is that someone is actually proposing a tax hike in a down economy. That is abject stupidity. Of course that is exactly what is currently happening on the national level, not just the state level. The second thing is that state employees were laid off. Obviously they were not essential to the workings of the government, hence their dismissal. That tells me that they was extra baggage that was attached to an already bloated bureaucracy. I feel for the people who lost their jobs. We had to deal with it in our own household, too, as my wife used to be a government employee. I know first hand as a former state employee that there are more employees than are necessary for the efficient running of the government. I also know that some agencies are anemic on employees whereas other departments are employee laden and bloated.
On December 15, 1802, Thomas Jefferson said in his annual address to Congress, “...when merely by avoiding false objects of expense we are able, without a direct tax, without internal taxes, and without borrowing to make large and effectual payments toward the discharge of public debt and the emancipation of our posterity from that mortal canker, it is an encouragement, fellow citizens, of the highest order to proceed as we have begun in substituting economy for taxation...” Congress, along with the previous two administrations had instituted certain taxes. Jefferson decided to eliminate those taxes and instead allow the economy to grow. A growing economy with lower taxes actually eventually brings in an increased amount of revenue. John F. Kennedy, Ronald Reagan, and George W. Bush also knew this principle.
One oft overlooked portion of that quote is “avoiding false objects of expense”. This simply means cutting spending levels and unnecessary expenditures. Jefferson also endeavored to eliminate the public debt rather than allow what he considered a moral canker to affect future generations. In all of the presidential administrations from George Washington to George W. Bush, the national government accrued some $12 trillion in debt. Under the present administration alone, we have doubled that figure. Jefferson would have most certainly considered this more than just a moral canker.
The Town of Smithfield has not figured out simple economics yet, either. Smithfield is attempting to force new businesses just outside of their public utility boundary to use their services rather than allowing them to use the cheaper, equally available electricity provided directly from Progress Energy. It is all about bringing in more revenue into the town. It has nothing to do with fostering a business friendly climate under which a company can thrive. It is all about feeding the voracious appetite of government.
I have written of my views on public power grids and their detrimental affect upon citizens and business. It would be one thing if Smithfield offered rates the same as Progress Energy, but they don’t. Furthermore, it is unconscionable to me to force businesses to go with a higher energy cost just because a town wants to use its governing power to gain more revenue. Lower overhead costs like the cost of electricity will help foster a better business climate, not forced, punitive, higher rates. Anything higher than what the power company would charge is nothing more than a tax increase, and I doubt that Thomas Jefferson would find it to be anything more than yet another moral canker.
The plan that he has been pitching is to reinstate a one penny (1%) sales tax hike to fund state jobs that have recently been cut. His wants to rehire over 6,400 state employees that were laid off because of budget cuts. His claim is that the tax hike would bring in over a billion dollars a year. His slogan is “Give a penny, hire a state worker.” I will admit that a one cent sales tax would be nearly invisible to the average shopper. When I go to Wal-Mart and spend a few hundred dollars, I may never notice the increase in the tax. However, over a year’s course of time, that one penny sales tax hike adds up.
Several things occurred to me as I read the news story. First is that someone is actually proposing a tax hike in a down economy. That is abject stupidity. Of course that is exactly what is currently happening on the national level, not just the state level. The second thing is that state employees were laid off. Obviously they were not essential to the workings of the government, hence their dismissal. That tells me that they was extra baggage that was attached to an already bloated bureaucracy. I feel for the people who lost their jobs. We had to deal with it in our own household, too, as my wife used to be a government employee. I know first hand as a former state employee that there are more employees than are necessary for the efficient running of the government. I also know that some agencies are anemic on employees whereas other departments are employee laden and bloated.
On December 15, 1802, Thomas Jefferson said in his annual address to Congress, “...when merely by avoiding false objects of expense we are able, without a direct tax, without internal taxes, and without borrowing to make large and effectual payments toward the discharge of public debt and the emancipation of our posterity from that mortal canker, it is an encouragement, fellow citizens, of the highest order to proceed as we have begun in substituting economy for taxation...” Congress, along with the previous two administrations had instituted certain taxes. Jefferson decided to eliminate those taxes and instead allow the economy to grow. A growing economy with lower taxes actually eventually brings in an increased amount of revenue. John F. Kennedy, Ronald Reagan, and George W. Bush also knew this principle.
One oft overlooked portion of that quote is “avoiding false objects of expense”. This simply means cutting spending levels and unnecessary expenditures. Jefferson also endeavored to eliminate the public debt rather than allow what he considered a moral canker to affect future generations. In all of the presidential administrations from George Washington to George W. Bush, the national government accrued some $12 trillion in debt. Under the present administration alone, we have doubled that figure. Jefferson would have most certainly considered this more than just a moral canker.
The Town of Smithfield has not figured out simple economics yet, either. Smithfield is attempting to force new businesses just outside of their public utility boundary to use their services rather than allowing them to use the cheaper, equally available electricity provided directly from Progress Energy. It is all about bringing in more revenue into the town. It has nothing to do with fostering a business friendly climate under which a company can thrive. It is all about feeding the voracious appetite of government.
I have written of my views on public power grids and their detrimental affect upon citizens and business. It would be one thing if Smithfield offered rates the same as Progress Energy, but they don’t. Furthermore, it is unconscionable to me to force businesses to go with a higher energy cost just because a town wants to use its governing power to gain more revenue. Lower overhead costs like the cost of electricity will help foster a better business climate, not forced, punitive, higher rates. Anything higher than what the power company would charge is nothing more than a tax increase, and I doubt that Thomas Jefferson would find it to be anything more than yet another moral canker.
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