Let’s capitalize on sales tax revenue


I would like to congratulate those responsible for a significant and apparently unexpected growth in sales tax revenue for the city of Grand Junction. The people responsible for that growth are you and pretty much no one else.

I say that because I thought we would jump ahead of the usual rounds of self-congratulation from various bureaucracies that believe they are responsible for whatever growth that takes place yet mysteriously have no responsibility for losses of jobs or income.

To paraphrase: The process of making money has many parents but losing it is an orphan.

An increase in sales tax revenue predominantly is the result of confidence in the short-term economic picture, job stability and an increase in wages.

In our situation, there is an eerie correlation between changes in federal policies toward energy development and land use and the brightening of economic prospects and consumer confidence.

It is unlikely you’re going to hear too much about that because everyone associated with one giddy scheme after another to supposedly increase business in the area, will act as though their idea was the prime mover.

However, it’s unlikely that old movie and free toothpick night at The Avalon really turned the economy around.

For instance, Grand Junction, according to a Daily Sentinel story Monday, is expecting an $18 million increase in its budget and a $900,000 surplus, which will be immediately digested until the next sky-is-falling pronouncement and another demand for a TABOR override is placed on the ballot.

The part about the sky falling is my addition, based on experience and utilizing a technique the Supreme Court has often used to find new insights into the Constitution without having them actually written down.

Now, remember that it takes $10,000 in sales to generate $275 in sales tax revenue – that requires the sale of a lot of popcorn and Milk Duds to get to those numbers, so I feel safe in saying it’s not a major component.

Significant monetary gains in sales tax requires an across-the-board increase in consumer spending.  However, there is much to be said for taking windfalls and using them to diversify the economic base.

Having one prime mover is always dangerous and inevitably leads to boom and bust cycles. For example if you’re a banana republic, you need to hope bananas don’t go out of style.

With that in mind, I think it is wise to put unallocated money into economic development programs that can provide significant incentives for new types of industries. Since everyone seems to be quite interested in the tech field, let’s cast our eyes toward Iowa.

That’s because Iowa is experiencing one of the larger growths in technology associated industry. Apple, Microsoft and others have made significant — that is billion-dollar investments — in the state such that they have begun referring to themselves as “Silicon Prairie.”

Mainly these have been in the arena of data centers and other secondary technology hubs. Iowa is chosen because it is centrally located, mostly free from natural disasters such as earthquakes, tsunamis and Korean dictators, has a reasonable cost of living, an eager workforce and most importantly,  extensive economic incentives to attract businesses that generally have a large footprint.

The other thing these industries like to capitalize upon is the idea that they utilize renewable energy for much of their operation. Whether that makes good sense is not important. If they believe it makes their customers / shareholders happy and buy their products and stock, then it makes sense.

Iowa, because of its location,  does have wind power programs. The state uses them to attract industries seeking to feel good about having all the unpleasant manufacturing for their products done in China but still feel very high-minded here in the states.

That’s fine, if it means good jobs to our area then, surprisingly, it might not be a bad investment. Here we have a lot of sunshine and we could probably manage a couple of solar farm powered industrial parks if it would bring someone here for the lifestyle and the idea that they can tell everyone they’re using solar power for their data center.

With revenues on the upswing let’s take that money and look at unconventional solutions and models that are working other places.

I’m not usually a proponent of this sort of thing, but if it works we should try it. I propose putting together a group — not outside consultants; we have plenty of good people right here — to examine the idea of a solar industrial park to pitch to tech companies for data centers that don’t require transportation of goods from our rather remote area.

I know several people in the area that would be good at working on this project including an engineer friend of mine from the valley who moved back here from Silicon Valley and thinks he should be playing golf all the time.

The people have created some capltal. Let’s see if we can do something productive with it.

Rick Wagner is a Grand Junction attorney who maintains a political blog, The War on Wrong. He can be reached at .(JavaScript must be enabled to view this email address).


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