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Dick Palmer: Budget woes create added need for plan

On the other page of this op-ed section, I am talking about Duluth's missing link and seeking ideas from our readers. This is expecially important now that the city administration is posturing to fight a budget deficit by increasing costs for cit...

On the other page of this op-ed section, I am talking about Duluth's missing link and seeking ideas from our readers. This is expecially important now that the city administration is posturing to fight a budget deficit by increasing costs for city services as its main strategy in addition to cutting some services and probably increasing the tax formulas.

Apparently, the city budget process is coming up short by about $1.4 million, so the pressure is on to quick fix rather than think this out, looking beyond the red ink on the page at the moment. The lack of a plan to seek long-term efforts looking beyond a yearly budget deficit that most assuredly will come up short again 12 months from now is troublesome to me. Naturally the city position seems to suggest increasing taxes or otherwise adding expenses (user fees) for popular services as the logical solution.

Innovation is not in this plan and that's what is needed most as Duluth, as the hub of a relatively large population base, is in the spotlight not only for today or tomorrow, but as the anchor of economic resurgence. We are moving to a worldwide economy that has changed government planning and goal seeking as never before.

Real estate taxes are the main source to fund local government. They are confusing to most because our county real estate tax statement covers county, municipal and school funding. The county has already announced it does not intend to raise its portion of the tax levy for next year, so most of us feel pretty good about that. However, Duluth municipal and school district assessments appear to be on the rise so don't hold your breath.

Looking at the taxing issues creates all kinds of speculation by those of us who have been around for some time and witnessed the good and the bad through economic boom and gloom periods. In most instances, creating jobs, developing economic growth through the private sector and being able to compete with neighboring areas has been the main stay of our job base. But Duluth has had its problems and government handouts have not been the solution.

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Look at the Iron Range today. There has been a solid resurgence in the mining industry, and the spin-off from that resurgence has triggered additional opportunities for Duluth and its neighboring communities. Many suppliers to the taconite industry are providing more goods and services and that means additional jobs and renewed opportunities for lasting area employment. That's the secret to success. If business can expand and remain profitable, government gains from the taxes based on that profit profile and area employment is stabilized.

However, too many in government, especially in this area, cannot accept this basic economic concept and are constantly looking for ways to punish employers. Frankly, it doesn't make sense, but we have a political attitude in our area that has always opposed business as if business owners must readily succumb to government policies or else. Unfortunately, many former Duluth employers simply bailed out.

So now, locally, the city administration is planning to put in parking meters in Canal Park. Local merchants aren't going to like that. And the plan to charge some business owners with user fees for city fire department inspections is also suspect. These are additional costs that only distract business expansion when, in fact, expansion adds employment to this area. This lack of job opportunities has always been Duluth's Achilles heel.

Duluth leaders need to look long-range at this city's needs and potential opportunities. Jobs, that's the answer, and taxing businesses to death is certainly not the solution. We need a plan.

Dick Palmer is the former editor and publisher of the Budgeteer News. He may be reached by telephone at 729-6470 or by

e-mail at rpalmer@duluth.com .

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