The trouble with rebates for renters

Left in the West makes a good point about the plan that Rep. Mike Lange (R-Billings) has proposed, namely to extend in some way the proposed one-time property tax rebate (that both Democrats and Republicans agree on) to renters. A similar proposal has been made by Rep. Kendall van Dyk (D-Billings), but there isn't as much cognitive dissonance in such a proposal coming from a Democrat, as will be noted below.

LITW correctly points out that in a Republican plan where all property owners would get property tax cuts, this would mean that a landlord would get a tax cut and his renters would get a "rebate," amounting to a double "rebate" on the same property.

It is diappointing to see a proposal for a double rebate coming from a member of the GOP, a party that opposes double taxation (such as the death tax and taxes on stock dividends) as a matter of principle. One hopes that Rep. Lange, in his desire to please his constituents, simply didn't think this one through. He may just be engaging in the art of the possible, but if so, this should be stated forthrightly.

One could make the argument that the budget surplus reflects excessive property taxes paid, part of which came from renters via higher rents. By this argument, since the rebate part of this plan is intended to put a floor on the amount of the budget surplus return that someone gets, the renter is getting back what he overpaid.

That, however, is stretching it. More realistically, renters will get the benefit of lower property taxes in the same way that they suffered from higher rates -- indirectly. Rents should rise more slowly than would otherwise be the case (has anyone ever seen their rents actually drop?)

At the end of the day, for a Republican to want to hand out direct property tax "rebates" to people who don't directly pay property taxes looks suspiciously like pandering for votes by mailing out government checks -- something that Republicans should, at least in theory, be in the business of avoiding.

A thanks to LITW for picking up on this flaw in Rep. Lange's idea, and also for supporting the Governor's plan over that of Rep. van Dyk -- since of the two, the former is certainly superior, both conceptually and practically.

"All hat, no cattle" so far for Dems on coal development

As the Gazette reports today, the much trumpeted (and newly discovered) Democrat interest in coal development isn't translating into substantive policy proposals.

No surprises here. It isn't that hard to figure out how to make the state friendly to energy development, and to do so in an environmentally safe way.

But it appears that the Democrats enjoy the benefits of the political posturing that is necessary in a right-leaning state like Montana, while not being as interested in actually breaking the Democrat mold and promoting real energy development, which in Montana certainly means "green" sources such as wind but as a practical manner means coal and oil.

We now learn that the Democrat plan for coal is to wait for the private sector to commit money to development plans, and then decide whether or how to help out.

And as always, oil is not mentioned at all, even though it is a proven resource and one that helps the fading economy of eastern Montana in places where there aren't coal resources.

Gazette unable to find worker helped by minimum wage increase

The Gazette's top story today is headlined "Increase in base wage will hurt some businesses, help some employees."

As is so often the case, the headline doesn't reflect the content of the story. The Gazette failed to find a single worker that it could quote as having been helped by the minimum wage increase.

The article itself is a very good one, and should be read in its entirety in order to understand the interplay of factors in the issue of minimum wages.

There was no problem finding people to quote who say that the increase would hurt both businesses and workers. It also pointed out that an increase in the minimum wage would not have a meaningful effect on any Montana worker trying to live on a minimum wage job.

The reality, as the Gazette reported in more than one story last year, is that outside of the food service industry, where minimum wage workers receive a substantial portion of their wages in tips, it is hard to find any Billings workers who receive the minimum wage, or entry-level jobs that offer minimum wage (even under the new standards.) The proverbial job of flipping burgers certainly doesn't pay minimum wage in Billings. Even summer jobs for teenagers rarely pay minimum wage. This is doubtless true of the state in general.

As the director of the Salvation Army in Billings is quoted as saying, the raise will probably raise the base cost of goods and services in Billings, thus being an overall negative for those with lower incomes.

A respected restaurant owner has already made new menus with higher prices, and the head of the Job Service has this to say:

"The only place I really see it hurting is at bottom rung of the employment ladder.... Employers are really going to be looking hard at whether they need another employee. It may mean there will be fewer entry-level jobs."

Like so many issues pushed by Democrats, the minimum wage increase was driven by the political points to be scored by appealing to emotion -- even though the hard facts point out that it doesn't work. Just like the issue of soaking the "rich" with high income taxes, which was discussed before on these pages, the point is not what pencils out as being best for Montana. Rather, what matters is whether it gives Democrats yet another issue to demagogue.