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Madison Loves Pit Bulls, Shrugs at Business Tax Kickback

The Madison City Commission approves a tax kickback as a special favor to one business, and what does everyone come to the commission meeting to complain about? Pit bull regulations.

Several pit bull owners spoke in defense of their pets, saying that dog problems in Madison went beyond the pit bull breed. They spoke in favor or registering all dogs and holding the canines that misbehave responsible for bad behavior. They also supported penalties for irresponsible dog owners [Chuck Clement, "City, Residents Hold Discussion on Dog Behavior," Madison Daily Leader, 2011.05.16].

Great. Fine. Whatever. Meanwhile Madison rips off neighboring communities and transfers a million dollars from the public sector to one private corporate pocket.

Grrr. Now I feel like biting someone.

27 Comments

  1. Eve Fisher 2011.05.17

    Welcome to Madison, Cory.

  2. Jeni 2011.05.17

    I think people turn out for the things they care about. If you care about it you come there. I'm guessing since you care passionately about the tax, you were there, and you spoke out. I feel for you if you had to speak out alone, but I applaud your bravery for it.

  3. mike 2011.05.17

    I'm happy for the Dogs!!!

  4. Erin 2011.05.17

    Does this mean Madison will finally have the money to pave its gravel streets?

  5. tonyamert 2011.05.17

    CAH-

    For you this is a moral problem. You view this as a fairness issue. From a policy makers positions; however, there are arguments to be made that it will actually increase total tax revenue.

  6. Matt Groce 2011.05.17

    Welcome to Madison? Eve what in god's name are you talking about?! Are you really so jaded as to believe that only in Madison would dog owners show up to a commission meeting that is considering ordinances restricting dog ownership? Jeni is right, people cared about this, and good for them. If there was a proposed ordinance regulating pie and bad poetry, bakers and bad poets would show up to listen. Last nights meeting in no way reflects negatively on Madison or its citizens, despite what your snide comment would suggest.

    I don't see how you could expect the citizenry to be angered over the Custom Touch announcement. Madison gains tax revenue, gains jobs, maybe even gains kids in the school. More homes built means more sub-contracting with local company's like Montgomery's, DFC, and Rosebud.

    This isn't an evil oil company not paying taxes, there's no off-shore bank accounts here. Custom Touch gets half the *new* sales tax on the home sales, as long as they meet the new jobs requirement set forth in the agreement. Madison get's a whole lot of tax revenue that was, heretofore, unavailable. This is exactly what economic development should be, helping locally owned small business continue to grow. As long as the partnership is mutually beneficial it should be encouraged.

    If this were an art studio that produced sculptures and monuments, then shipped them off to other locations, would you still be this condescending?

  7. caheidelberger Post author | 2011.05.17

    Matt, yes I would. This kickback takes money out of the public pocket and places it in one favored private pocket. Remember, it's not "new" sales tax; it's current sales tax that we are pirating from other communities.

    If Madison wants to lower its municipal tax to one percent, it should do so on all sales for all businesses. If we are going to apply sales tax based on point of sale rather than point of delivery, we should do so for all sales for all businesses, and Madison should kiss goodbye any sales tax remittances from Dell, Amazon, et al.

  8. Charlie Johnson 2011.05.17

    Matt, The tax rebate program is wrong for many reasons. (1) Taxes are applied to provide services not to provide rebates, credits, or kickbacks. Madison along with many other entities have obligations that are not presently being met. madison school Districtis one of them. Look at the federal tax code, it is so riddled with social engineering and corporate welfare, it has no respect or true standing whatsoever. (2)Matter of fairness-what is be said to any other Madison business or vendor that is now the tax collectors for the city of madison. Should they not be treated the same and get 50% kickback. (3)Presently this 2% goes to other cities/entities. Is madison ready for the subsequent actions/reactions by others? Probably not. (4) By not providing the rebate, what was Custom Touch going to do? Not build homes? Hardly!! I as a business person(farmer) work hard for my money and pau taxes also. I see plenty of needs to be taken care including MHS renovation and yes the county and township roads. I can't drive my two miles of township road to get to the county oil without bottoming out constantly in major ruts and gullies. I'll take the madison Santa Claus money anytime to fix our roads.

  9. Matt Groce 2011.05.17

    Well to bad for the other community, I'm not going to lose sleep tonight. Their still getting new homes with plenty of property tax. If they want sales tax they can build it themselves. They came to Madison to buy the house.

    The larger point is this; if we are going to have economic development, it should look more like this. It's a lot better then the Trans Canada nightmare, and more effective then louring a failing business here with cash handouts.

  10. Tony Amert 2011.05.17

    To further your point Matt, am I the only one who knows where most of the custom touch homes end up? I'll give you a hint, it's not even in the state of south dakota....

  11. shane gerlach 2011.05.17

    How to they feel about Mixed Martial Arts though?

    Shane (lightening the mood)

  12. Molly 2011.05.17

    North Dakota oil land correct Tony?

  13. tonyamert 2011.05.17

    Molly wins the prize!

  14. tonyamert 2011.05.17

    CAH-

    Also, your fairness argument can only be taken so far. Some businesses simply do not scale with additional capital. For example, the local coffee hang outs won't produce more or employ more if they were just a bit more profitable.

    Custom touch homes absolutely does scale. Their customer base is huge and not saturated. If you give them capital they will hire more people, produce more goods, and expand the local tax base.

    I guess, that to some extent I am biased here. I really have no problem giving more cash to businesses that are value added which custom touch exemplifies. If we were talking about perhaps giving the local grocery store a tax break I absolutely would be again it because that is simply a middle man business. So, take my comments with a grain of salt.

  15. caheidelberger Post author | 2011.05.17

    Matt & Tony: the even larger point is that Custom Touch would have done this without any government handout. If those houses are selling, Custom Touch is building. This is a hidden giveaway: those North Dakota oilpatch customers will see "2% municipal tax" on their bill and have no idea that 1% is actually pure profit that goes back to the company. Calling it "tax" is dishonest. I hope every Custom Touch customer dickers to get that 1% taken off their bill.

    By the way, why is the kickback channeled through the LAIC? Can't the ity write the check directly to Custom Touch?

    (Shane: MMA ordinance passed: bring on the fights!)

  16. caheidelberger Post author | 2011.05.17

    How about this suggestion for fairness: Let's use 2010's sales and employment numbers in Madison as a baseline. Any business that can generate more sales than last year and put more people to work gets a rebate on sales tax above that baseline, with the max set at $20,000 per new employee.

    And let's add a stick to our carrot: any business that lays off workers has to pay extra tax to the city. Sound reasonable?

  17. RGoeman 2011.05.17

    For every action, there is usually and equal and opposite reaction. With this action, we're taking sales tax away from another state and city, so what will the retribution action be?

  18. Lauri 2011.05.18

    The frequent comment tonight when people read the headline at the grocery store was wondering if the whole thing was legal.

  19. Eve Fisher 2011.05.18

    Yes, I'm jaded. But then I worked at the courthouse for five years and saw sausage being made. I know that the "court news" list is highly edited; so is all of our local news media; some people never appear in the news no matter what they do; some people never go to trial no matter what they do; when certain projects are on the line, people will do anything to get them passed (if you think everything was legal about the voting on the Community Center, you are naive); and that all sorts of things happen in SD that really aren't legal, but what the heck, they happen anyway because it's best for the municipality in question (think flushing raw sewage down the Big Sioux River). But, I also know this happens everywhere, not just SD or Madison. It's just it's easier here to find out the details - often they're shoved in your face. I'm jaded, but I'm equal opportunity, universal about it.

  20. tonyamert 2011.05.18

    I like that idea CAH. I really don't care who gets the carrot so long as Madison can get something of benefit greater in value than the carrot.

    Regarding the stick, that is more complicated. As an alternative, perhaps set the carrot up as a limited time bonus. Make it expire after x years automatically unless the company hires additional employees. That way, the businesses always have incentives to expand.

  21. caheidelberger Post author | 2011.05.18

    This agreement is capped at ten years and $1M. Small comfort. My big problem is that the public dollars we are giving up aren't increasing the public benefit. If Madison did nothing. Custom Touch would likely still expand to meet the apparent market need. It would hire the necessary workers and generate increased sales and sales tax. Pre-plan, those sales tax dollars go into public coffers, albeit not exclusively Madison coffers, to build public works. Post-plan, many communities lose public dollars, and Madison gets only half as much as it could have, as $1M reverts to private profit. The plan is a net loss for general welfare.

  22. joe thompson 2011.05.18

    I am confused. For the last couple of years liberals have been saying that the only way to improve the economy is by using my income taxes to provide incentives to employers in California to hire new workers. Liberals and the Democratic party have espoused this idea for years and now when the Madison City Commission legally takes sales tax money from North Dakota to provide an incentive for a business in Madison to create jobs it's wrong? Cori, it would appear to me that the citizens of Madison have a net gain of 1 million dollars in tax revenue and 50 new jobs. Seems to me that the Obama administration could learn a lesson from the Madison City Commission on how to increase tax revenues and create jobs. Maybe the MCC could be convinced to use some of that 1 million dollars to help the schools.

    Joseph G Thompson

  23. joe thompson 2011.05.18

    Eve,
    You are not jaded, you are a liberal who sees and lives in the real world and just does not like what she sees and I am a reactionary who sees and lives in the real world and does not like what I see, but we have both tired of jousting with windmills. It is what I love about you.

    Joseph G Thompson

  24. caheidelberger Post author | 2011.05.18

    No confusion here on Lake Herman, Joe! I'm open to your clarifying which specific liberal/Obama program(s) you're talking about, and maybe I'll agree they are stinkers. But I will say there's a difference between a stimulus plan aimed at keeping the economy from sliding from recession into depression and a kickback that doesn't increase the amount of job or business expansion the market already supports for Custom Touch.

    But saying that our local commission is acting like liberal President Obama hardly counts as praise in the book of the Republicans running the LAIC and the Chamber, I would think. The ideological confusion appears to be down at the depot and at City Hall.

  25. joe thompson 2011.05.18

    Cori,
    We could start with General Motors, Chrysler and Wall Street and go on to General Electric. Billions of dollars, loss of taxpayer dollars, and no new jobs. But, that is beside the point, since Dems and Repubs alike supported.

    This sales tax rebate is just a new twist on property tax breaks and loans that states and cities have used for years to attract business, just that it does not cost local taxpayers anything. Don't like any of the incentives, because you can't buy loyalty.

    Agree though it does show hipocracy on the part of many people. Self interest trumps ideology, that is the real world that exists in both the Democratic and Republican parties today. Told you before there is no difference between Dem and Repubs today except who they want to give your money to, self interest trumps political ideology.

    Joseph G Thompson

  26. caheidelberger Post author | 2011.05.19

    Joe, I'll still contend your picture is oversimplified, but if the only difference between Dems and Repubs is whom they want to give the money to, then Dems deserve to win. I want to direct that money toward schools, parks, roads, police, and other services that make life better for everybody, especially for those who aren't well off. This tax rebate gives money directly to people who can get by without it, who are already providing more jobs and consumer goods without a gift from city hall, and who may just squirrel all that money away in their personal stock portfolio rather than directly improving the general welfare.

  27. joe thompson 2011.05.19

    Cori,
    With in a society there are no complex problems, only problems that we refuse to face because of ideology.

    There are no complex solutions, only decisions we refuse to make and solutions we refuse to impliment.

    All problems are simple if we face them and all solutions/decisions are simple if we choose to make them.

    We must first face reality.
    Joseph G Thompson

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