So why do I think that granting government more power is a bad thing? Because government and those who advocate for it will tell you whatever is necessary to gain the power, but will not follow through on any of the promises. Having learned this lesson, a few months back I decided to start asking a few questions and doing a little digging around about the origin of the Victoria Sales Tax Development Corporation.
The first thing I wanted to know was what the voters had in front of them when they made their decision "for" or "against" the 1/2 cent sales tax. Namely, what was on the ballot. Here is how it read:
CITY OF VICTORIA
Proposition No. 1
The adoption of an additional sales and use tax within the city at the rate of one half of one percent as authorized by Section 4B, Article 5190.6, V.T.C.S., as amended (the Development Corporation Act of 1979), with the proceeds thereof to be used and applied to the purposes authorized by the Act. La adopción de ventas adicionales y usar el impuesto dentro de la ciudad a razón de una mitad de un por ciento como autorizado por Sección 4B, Artículo 5190.6, V.T.C.S., como enmendó de (la Corporación del desarrollo Actúa de 1979), con los beneficioses que se emplear y aplicar a los propósitos autorizado por el Acto.
Naturally, that leads to two questions...
1. Who in the world actually read Section 4B of the Development Corporation Act of 1979?
2. What does Section 4B say?
Whatever the answer to the first question is, it was definitely not enough. As for the second question, wonder no more:
Creation of Corporation; Texas Small Business Industrial
Sec. 4. (b) There is hereby created the Texas Small Business Industrial Development Corporation which
shall act on behalf of the state to carry out the public purposes of this Act. The Texas Small
Business Industrial Development Corporation shall be considered to be a corporation within the
meaning of this Act, shall be organized and governed in accordance with the provisions of this
Act, and shall have all of the powers, and shall be subject to all of the limitations, provided for
corporations by this Act, except as otherwise provided by this section. For purposes of this Act,
the state shall be considered to be the unit under whose auspices the Texas Small Business
Industrial Development Corporation is created and the department shall be considered to be the
governing body. To the extent that the provisions of this section are inconsistent with other
provisions of this Act, the provisions of this section shall control as to the existence, powers,
limitations, organization, administration, operation, and affairs of the Texas Small Business Industrial Development Corporation.
Notice how many times the words "small" and "business" appear in succession just in this one section? Do you think this Act would have passed if the truth had been told - that it was a way to make big businesses a lot bigger? Who among us would consider Caterpillar a "small business"? Starting to see how the government lies to get what it wants? But wait, it gets better.
Once the idea was sprung, the City of Victoria had to act as though they were objectively considering the creation of such an entity, rather than licking their chops at the idea of a slush fund that very few would pay attention to. After all, who ever checks the sales tax rates in a given town before they decide to shop?
Once they had all their ducks in a row, the City issued a Statement of Position. I am not going to go over this document point by point, but I recommend reading it several times. With the knowledge of what has transpired over the past 15 years, some statements made in this document should raise your blood pressure just a little bit.
Then the City passed a resolution to place the measure on the ballot. An interesting excerpt from the resolution:
"WHEREAS state law allows cities to hold an election for the purpose of submitting to the voters a measure for adopting up to an additional one half of one percent sales and use tax for the purposes of funding a Development Corporation as authorized by Section 4B Article 5190 6 V T C S as amended the Act with the proceeds thereof to be used and applied to the purposes authorized by the Act including but not limited to public street traffic control drainage parks water and wastewater improvements and the maintenance and operating costs associated with such projects
WHEREAS the City Council finds that funding such projects as authorized by the Act through such a tax will be less costly to the City than deferring maintenance or issuing bonded indebtedness and
WHEREAS the City Council desires to hold any property tax increases to City residents to a minimum;"
Um, yeah, you are reading that correctly. Let it sink in just a moment. you may want to wrap your head with duct tape to keep it from exploding.
But this is not where the story ends. You see, corporations have these pesky little things called Articles of Incorporation. These Articles perform several functions, among them is spelling out the tax status of the corporation, along with any requirements and prohibitions that may affect said tax status.
The Articles of Incorporation for the Victoria Sales Tax Development Corporation say several things, including:
In accordance with the provisions of Section 501 c 3 of the United States Internal Revenue
Code the Corporation a shall not pay dividends and shall not permit any part of the net earnings
of the Corporation to inure to the benefit of any private individual except that reasonable
compensation may be paid for personal services rendered to or for the Corporation in effecting one or more of its purposes b shall not direct any of its activities to attempting to influence legislation
by propaganda or otherwise c shall not participate in or intervene in including the publication or
distribution of statements any political campaign on behalf of any candidate for public office and
d shall not attempt to influence the outcome of any election for public office or carry on directly
or indirectly any voter registration drives"
That bold part is pretty interesting, considering recent developments, wouldn't you agree?
It goes on to state "No part of the Corporation s income shall inure to the benefit of any private interest. No dividends shall ever be paid by the Corporation and no part of the Corporation s net earnings
remaining after payment of its expenses shall be distributed to or inure to the benefit of the director
or officers or any individual firm corporation or association other than the City of Victoria."
This statement would appear to me to be a prohibition against the expenditure that is transferred every single year to VEDC. VEDC is a corporation, right? And they are not the City of Victoria, right? OK, just wanted to make sure.
Just to recap:
Idea to get more of the public's money - CHECK!
Sell only the most palatable portions of the law - CHECK!
Make people think they will actually be saving money by allowing an additional tax - CHECK!
Make people think that someone else is paying for the additional tax - CHECK!
Annihilate all opposition by calling their concerns and reservations stupid and stone age - CHECK!
Get the local propaganda machine (aka The Victoria Advocate) to sell this beast to the serfs - We will explore that in a later blog...
The moral of this story is that the government is not to be trusted. I was once told by a man that whenever an agent of the government speaks, ask yourself this question - How does the government benefit if I believe what I am being told?
That is good advice, considering it is impossible to un-ring that bell.