Tuesday, September 12, 2017

SD Senator Thune Sticks It To Consumers

     Our Senator John Thune said in the Rapid City Journal yesterday (9/11) that his "biggest priority for the remainder of the year" is tax reform.  Thune wants to send the president a
Sticking It To Consumers
package that will help "middle class South Dakotans who are struggling to make ends meet."  

     That's a nice enough sentiment, but while Thune's heart is in the right place, I'm not sure his head is following suit.  In fact, Thune kept his bias against middle-class consumers out of his RCJ piece.  In his website, he was recently praising the general thrust of his trickle-down tax reform philosophy by saying we "need to move our tax system more toward taxing consumption rather than savings and investment."  
     He then reveals a lack of interest or attention to his home state's constant struggle with that very tax policy by stating that "South Dakota is, of course, a great example of how to do this at the state level."  Yes.  "Of course."  Thune's infatuation with our state's regressive tax structure is so complete that he now wants to inflict it on the rest of the country.  Does the Senator understand that our reliance on sales taxes has led to a regular budget re-set derby among state government officials who've had to change projections twice during the past three years because sales tax receipts fell significantly short of expectations?  This is what happens in a state where consumption (sales and gross receipts) taxes are the dominant source of revenues.  South Dakota in 2015 got 82.4% of its state revenues from sales taxes, compared to a national average of 23.3%.  And Thune calls South Dakota a "great example" of efficient taxation?  Please.
     Meantime, when it comes to championing the economic interests of South Dakota's mid- to lower-income residents, Thune's proposal to focus on tax relief for savings and investments means virtually squat.  In his RCJ piece, the senator notes that half the public lives paycheck to paycheck and that a third are $400 bucks away from a serious financial crisis.  I doubt South Dakotans who fit that profile are cheering Thune's notion that a tax break for those who save and invest will make them better off.  In his website's trickle-down polemic, Thune claims that Reagan-era tax cuts were responsible for the economy's bounce-back during the 1980s, completely ignoring that federal spending increased by 2.5% a year from 1981-1989.  The federal debt during that era went from $997 billion to $2.85 trillion. Those who know something about John Maynard Keynes and his theories about government spending driving economic growth are sagely nodding their heads. We also wonder why trickle-down proponents never mention Reagan's ballooning deficits. 
     I cheer the prospects for Thune's style of tax-cutting as lustily as any of my peers in the business community, but I also know that without consumers my business interests wouldn't amount to much.  Consumer spending represents more than 70% of the American economy. Giving us business types some tax relief is indeed likely to drive more investment and capital spending, but to do so by "moving our tax system more toward taxing consumption rather than savings and investment" makes no sense.  Thune needs to focus on those who spend, not on those who save.  

Tuesday, September 5, 2017

We Need A Multi-Lingual Workforce In South Dakota

      We South Dakotans might as well face the fact that developing multi-lingual opportunities is probably the only realistic way to advance our economic interests.  A piece in
Immigrants Matter
last week's Sioux Falls Argus Leader showcased the problems that our state's most powerful region of economic growth, the Sioux Falls metro area, is having with this. The construction trade in particular is finding it hard to fill its workforce needs because of a built-in language barrier that's written into our state's laws.  Specifically, South Dakota's legal requirement that all government documents--including drivers license exams--be written in English is turning into an economic roadblock.  The English-only law was adopted in 1995, apparently to save printing expenses, according to a retired legislator, Mel Olson, who helped push the bill through. Olson told the Argus Leader that there was "never any intention on prohibiting giving the driver's license test in other languages."  

     Olson's deeper explanation--that the law's intent was to save the state money by blocking an effort to get official state reference guides printed in Lakota as well as English--has some questionable overtones, but regardless of the objective, the  unintended consequence now poses a problem.  This is a law that needs to be refined, if not altogether repealed.  I have some background in this.  My family came up through the immigration ranks (I was born in a refugee camp in Rome, Italy) of the post-WW II era. Nearly seventy years later I'm actually pretty glad that in our day we refugees seeking a new life here in the U.S. were by custom and circumstance totally immersed in English.  By any standard we Tsitrians have done pretty well for ourselves and our communities, an outcome that I believe was energized and accelerated by our quick adoption of English as the language of our household.  I wish that were the case for every immigrant in this country--but it isn't.  
     And the fact that it isn't has come home to roost right here in South Dakota, where we have to grapple with the fact that English immersion for immigrants will probably never be a fact of our state's economic and cultural life again.  Nostalgia for our historic character as a "melting pot" doesn't get the job of building our economy done, as a lot of South Dakota enterprises are finding out.  In Sioux Falls, the head of the local chapter of the Associated General Contractors tells the Argus Leader that immigrant labor is "hugely important" to the construction trade, a fact that anybody in the Black Hills who's had a roof installed in recent years knows first hand.  I've put up three roofs, two commercial and one residential, in the past four years and I'm pretty sure that each crew was close to 100% Spanish-speaking, with only the lead installer capable of communicating in a halting version of English on each job.  
     I doubt that roofing and other contractors here would have much luck putting adequate work crews together without Spanish-only speakers making up a good share of the workforce. The much-discussed labor shortage brought up frequently in state government circles is one that is only magnified by making it difficult for non-English speakers to gain some sort of residential and professional toehold in South Dakota.  By at least making driver's licenses accessible to them in their native tongues, as the Sioux Falls business community is promoting, our state will probably be doing itself some good on the economic development front.