Hoteliers want higher taxes

Last night at the Missoula City Council meeting, while we were all waiting for the vote on the zoning update, we were treated to a dog & pony show put on by one of Montana’s biggest economic interest groups. The mainly-government-funded Convention & Visitors Bureau (CVB), along with a number of hoteliers in town, trotted out their presentation for a Tourism Business Improvement District (Tourism BID). Some would call this a fee, others would say it is corporate welfare, while yet others would it a subsidy. Me? I name it a tax increase.

In a nutshell, every person who stays in a hotel within the City limits would be charged 75c per room per night. That money is then assessed on the Property Tax bill, collected by the City Treasurer, and handed over to the CVB to spend. How the Tourism BID monies are spent is then decided by a Board of 5-7 hoteliers who are appointed by the Mayor (although board members can only be hoteliers).

Unfortunately, this is not a local idea. Not only are we supposedly playing catch up to other tourism markets (Billings, Spokane, etc.), but CVB’s all around the country are pushing this approach. (In fact, the presentation given to City Council last night was based on a state-wide template: How to Lobby for a TBID.) It is sort of like an arms race – because the other guys are doing it, so must we. And according to State law, the local CVB must be the Tourism BID manager. So, it is no surprise that Barbara Neilan, Sage Grendahl, and an assortment of CVB board members (past and present) all urged council to support the idea! Beneficiaries of other Missoula BID’s, such as the Missoula Downtown Association, the Missoula Redevelopment Agency, and the like, also came out in support of the model.

I’ve never quite understood why city council has to get involved. If it is such a good idea for development of the tourism industry, then I’m surprised that the tourism businesses don’t get together and form a Tourism Chamber of Commerce, levy a fee on themselves, and go right ahead and market away. Instead, the city has to get involved and force every hotel guest to cough up the dough.

So, what is the money going to be spent on? According to a Missoula CVB brochure, about a quarter of the money will be spent on adding new staff to the CVB with the majority of the rest going towards assorted marketing costs (branding, research, branding, web site optimization (!), and trade shows).

Listening in last night, however, it seems a major concern is the underwriting and sponsorship of events. Maybe they’re talking about events at the MEC (Missoula Events Center), but since that hasn’t yet been built, let alone approved and funded, I guess they can’t say that. Instead, it seemed to boil down to paying organizations to bring sporting events (mainly state high school championships) to Missoula. I wonder if they’ll also be giving money directly to the Women of Faith conference, the NRA regional gun-show, or a gathering, as well?

Nary a whisper last night of who is going to pay for the infrastructure necessitated by all these tourists in our town. If there’s a whole bunch more people driving around town, we’ll need to pave, repair, and plow our streets a bunch more. If all those tourists are downtown eating and drinking their hearts out, then I suppose we might need a few more police to keep an eye on them. And with all those wallets just bursting at the seams with money to spend in the oh-so-cute downtown boutiques, I suspect we’ll see more panhandlers that might then need accommodating for the night. Who is going to pay for all those city services, then? Us, of course.

And that’s the rub. Instead of this tax going into the general city coffers to be divided up as our elected officials see fit, you and I will have no say or influence in how the CVB spends the Tourism BID revenues. As one speaker mentioned last night, how do we know the CVB is the best qualified group to manage and disperse the funds? According to some hoteliers I’ve chatted with, there is no way they would support the Tourism BID if the city council, or even Missoula City, had any control over the Tourism BID funds. They point to what happened to the Statewide Tourism Bed Tax once the state legislature got a hold of it. (Err, instead of it all being spent on tourism advertising, it was also spent on the assets of the state – state parks, historic preservation, historical society, and the Lewis & Clark Bicentennary, etc.)

However, I can perfectly understand why some of the bigger hoteliers like the idea of a Tourism BID. It is a tax that someone else pays (the hotel guest), that someone else enforces (the city), and that they (the industry) gets to spend. Wouldn’t want to trust the voters or their elected officials to do what’s right, would we? I think we could call it taxation without representation.

Who’s gonna pay?

Hoo Boy, I love’s me a City Council Candidate Forum! Them’s candidates just say the dumbest dandiest of things.

Take Kathy Greathouse, candidate to replace Marilyn Marler in Ward 6, who was explaining her dislike of SID’s and other maintenance districts. Last night, Kathy said, “It’s just a tax to cover what the city budget doesn’t cover anymore.”

OK, I’ll admit that I don’t like the nickel and diming approach to paying for our city’s infrastructure. Every time we vote, either directly through the ballot for a mill increase or indirectly through the passage of SIDs by City Council, we are raising our taxes. It’s just that each little piece seems important enough. After all, how else are we going to pay for our fire stations, storm water systems, schools, museums, sidewalks, weed control, street sweeping and such?

Listening to the other ‘conservative’ candidates might help us answer that. According to the Missoulian, John Quandt, a candidate for Ward 3 where Bob Jaffe is the incumbent, isn’t in favor of maintenance districts unless there’s an offset for property owners. I guess that means that non-property owners will pay more!

Furthermore, Quandt suggests another way: community members who care about their neighborhood can volunteer. I know how well that’s going to work out. With our busy, busy lives we’ll now all be out there plowing the streets, teaching our neighbors children, forming a posses to round up the criminals, and giving immunizations at the city health clinics!

Then we throw in Ryan Morton, candidate for Ward 1 against Dave Strohmaier, who says there must be a decrease in general taxes as part of the package. Ward 5 Councilman Dick Haines agrees, saying he would lop $2 million off the city’s budget.

Do you get the pattern? Their vision for the city is no SID’s, an offset of taxes for property owners, and a lowering of general taxes. I don’t think the conservative candidates addressed impact fees (i.e. those who cause the impact should pay), but if they tow the building industry line they’ll be against them. Neither do they talk about local sales tax options, but the Republicans in the last State legislature were against them.

So, boil it all down and no-one should pay! Everyone will like that, right?

Down with government. Bad Government. And these are the people who are asking to run the local government? eek.

What’s his game?

Our proud representative for the whole of Montana, Denny Rehberg, recently gave testimony opposing the Northern Rockies Ecosystem Protection Act. He is quoted as saying that “more than 96% of us who live in these areas oppose this bill.”

Mr. Rehberg, perhaps, needs to get out a little more. Could he even find a single town, city, or pub in which 96% of people know about NREPA, let alone oppose it?

Instead, the harsh reality is, as outfitter-extraordinaire, Smoke Elser and a broad-ranging group of experts recently noted:

It has been 26 years since Montana has permanently protected a single acre of wild country. Since our last wilderness area was added in 1983, the nation has seen 439 new wilderness Areas created, none of them in Montana.

And, although I don’t know exactly where the figures come from, former state senator Paul Richards recently suggested that “78 percent of all Montanans support full protection for our region’s remaining National Forest roadless wildlands.” (I think he may be counting comments from the more than 1.6 million Americans wrote comments on the federal roadless protection policy, which is a dubious gauge of public sentiment. But, still. We would all agree that Montanans like wilderness.)

Then, in another scoop for, and then two days later in the paper of record, Denny Rehberg suggests that he is not opposed to wilderness just because he is opposed to NREPA. Instead, Rehberg says that,

The worst thing we can do for the public land we all cherish so much is put faceless federal agencies in control of something as important as land management.

Nevermind the hard-working folks in the U.S. Forest Service, all the National Park Service rangers, the proud federal firefighters , or the numerous fish & game agents that work at our National Wildlife Refuges. Denny doesn’t call those federal servants names, but he sure doesn’t seem to trust them, either.

What is the alternative? Turn over the public lands to the state government?

Perhaps, then, he might take a look at the what is going on all around the country. That’s right, state governments are struggling these days.

* In California, Governor Schwarzenegger is proposing to padlock and close nearly 80 percent of California’s state parks.

* Arizona is going to close 8 state parks.

* Out in Washington, a state park representative suggests up to spokesperson for the parks says they could see the closure of as many as 40 state parks.

* And, in Illinois, former Gov. Blagojevich closed 11 state parks and 13 historic sites.

So, let’s put the two together – first, take the public land away from the government of the American people, and second, give them to state agencies who can’t afford to manage them. The result? Further loss of confidence in government and increased calls to privatize the whole shebang. That’s right – why not let KOA, Backcountry Horsemen or even Disney manage our parks and wilderness? Aha, that’s his game.

And, he thinks that’s a workable solution that truly reflects Montana? I’m shocked, just shocked. Just when Montanans need their forests, parks, and wilderness more than ever, Rehberg simply wants to take them away from us!

Market failure

Nearly a week after a nasty ice storm knocked out power in Kentucky, more than 700,000 Kentucky homes and businesses are still without electricity. Currently, it is estimated this storm killed 43, most from hypothermia or carbon monoxide poisoning.

This alone is outrageous and indicates inadequate electricity infrastructure (i.e. weak power poles), inadequate maintenance of that infrastructure (i.e. not enough pruning of trees away from the wires) and insufficient on-call employees (i.e. not enough repair crews). But, now residents who rely on electric power are being told to evacuate their houses since they are now considered unsafe.

This strikes me as a classic example of the failure of a free market. I would guess that the residents couldn’t, at any cost, buy more dependable electricity. In the rush to greater profitability corners have been cut and there is nothing the consumer can do about it. Except seek greater government regulation.

Are there some things that are so important, so expensive to compensate for after the fact? Is your health and safety more important than allowing companies free rein? Would we be better off with a transparent and accountable government agency?

Let us not forget the Bay City, Michigan man who froze to death inside his home just days after the municipal power company restricted his electricity because of unpaid bills. Now I’m sure we don’t have the whole story, but it would appear Bay City Electric Light & Power didn’t value his life at more than $1,000 (his unpaid electric bills). As a business they have every right to refuse service to those who don’t pay. But, perhaps the provision of electricity can’t be left to the profit motives of the market?

The costs of these sorts of market failures, when utilities fail to invest sufficiently in maintenance or crews to rapidly repair damages, are still born by all of us. They don’t go away. In Kentucky, there have been millions of dollars lost from damage to homes, spoiled goods, and forgone productivity. And they have had to call out every single one of their National Guard members. We all pay. It just isn’t factored into the price we pay for electricity.

When we get injured by a faulty product or when there is a breach of contract, we would normally have the right to sue for recompense, damages or negligence. Utilities, however, are often protected from such recourse. They are a protected industry. Which is probably fine because otherwise nobody would want to take on the risk of providing our electricity, water, sewer, etc.

It all adds up to a colossal failed market. De-regulation of essentials doesn’t work.

To Save or Not To Save the Auto Industry

What should we do with the auto industry? On the one hand, they employ millions of people directly and support businesses that employ millions more. Can ourcountry handle the collapse of this industry in these already disastrous economic times?

On the other hand, I can’t really deny that they cars they make aren’t as good as their foreign competitors. They are less attractive, less functional, and have lower gas mileage than their foreign counterparts. They clearly haven’t done a good job of innovating and staying abreast of changes and trends in the market. Other auto companies aren’t suffering the way they are. So why should we help them? What precedent are we setting? What will be the next industry that we’ll have to help? Where does it end?

I also go back to the union issue. I am strong proponent of workers’ rights. However, even I have to admit that the unions have gone too far. Requiring lifetime benefits for someone who has only worked for the company for five years? I’ve never heard of that…ever. It seems unreasonable to me. Yet at the same time, I don’t buy that the only way that American auto manufacturers can compete with their foreign competitors is to cut employee pay and benefits.

What to do, what to do…

Better not get sick, or old

The deficit hawks are all a twitter. With the President-Elect (and most world leaders) planning a significant economic re-investment package, there’s folks already calling for stripping off all unnecessary spending.

Put aside that cutting back on spending would have a de-stimulating effect on the economy. And forget for a while who is most impacted by the current economic crisis (hint: it isn’t the CEO’s of Bear Stearn, Lehman Brothers, GM, Citibank, or AIG). Let’s think about what targetting wasteful spending really means.

We couldn’t convince the McCain campaign of this, but “you get almost nothing from cutting waste, fraud, and abuse“, according to Robert Bixby of the Concord Coalition. As I mentioned previously, cutting earmarks and making government more efficient just doesn’t add up to very much. Laudatory? Yes. A solution to deficit spending? No.

So, that leaves the two other big elephants in the room. The so-called entitlement programs and the military. Chop, chop. That’s their heads on the block, isn’t it? You can hear it already. To be fiscally responsible we’re going to have to cut back on Medicare (for the elderly and disabled) and on Social Security.

I get upset when we put these programs in the “unnecessary” or “wasteful” category. Not only are they some of the most successful and popular government services, but they are also some of the most efficient. And, right now, the most necessary. As health care costs are outrageously high and our 401K balances outrageously shrinking, we are going to need Medicare and Social Security more than ever. Maybe the uber-wealthy won’t need ’em, but the rest of us will.

Perhaps we could all show a little ‘personal responsibility’ in our twilight years. But, somehow I still don’t think I’m going to be able to afford a night or two in hospital. Instead, we might start seeing more and more hard-working citizens out pan-handling or in the soup kitchens, looking for a handout to get them through the winter.