Wednesday, October 24, 2007

The nonmonkey flunks international trade 

I think it's been a while since I feasted at the Coleman Cornucopia of Crapola. So hitting a hanging slider from Nicholas should be permitted.

He's having a cow over the purchase and registration of cars for the I-35W bridge reconstruction from Colorado.

Tuesday, I saw 15 trucks parked by the bridge site -- 12 Ford F-150 Supercab 4-by-4's with Triton V-8 engines, two Ford Explorers and one Ford Escape -- so new that many still have instruction tags hanging from their ignitions and control panels, and they have temporary state registration cards taped in their rear windows.

But those registrations are not from Minnesota, where Flatiron -- costing far more than local bidders, and taking longer to complete the project -- is scheduled to begin work next week. Flatiron's Fords are registered in Colorado; they were purchased in Littleton, a Denver suburb.

A Flatiron spokesperson did not respond to requests for comment, but permit me to sum up the situation here: Buying Colorado trucks for a high-profile project in Minnesota that still carries the emotional pangs of death and destruction? Dumb, Flatiron.

As Mark Perry points out, these are not Colorado "imports".
Ford F-150 pickup trucks are built in Kansas City, Norfolk, Detroit and Louisville, and would have therefore been "imported" from Missouri, Virginia, Michigan or Kentucky to Colorado, before being "imported" to Minnesota from Colorado.
As would be the trucks sold by John Wiese Ford in Sauk Centre, whose owner whines to Coleman about losing the sale. Perhaps Mr. Wiese could explain why, on a state contract, it would be acceptable to pay an additional 2.8% tax on the Minnesota-bought vehicles rather than those in Littleton, Colorado. That cost would have been projected into the contract Flatiron signed with the state and its taxpayers.
This is a company that was judged to have better public "outreach" than the local firms that lost out on the project, despite submitting lower bids. Would a Minnesota company buy a shiny new fleet for the project from, say, Colorado?
To save $39,200 on the expenses for this project? We may be dumb here, but we're not stupid. It would be an easy thing to fix -- just announce that contractors buying materials to fulfill a state contract get the goods tax-free if bought in Minnesota (which would push bids down; JOBZ has such a provision.) And Coleman also wanted to pick up the Hennepin county tax on this purchase, a cool $2100 towards building the Twins stadium (using his figure of $1.4 million for the trucks Flatiron wants to purchase, not the even million Coleman uses to keep his math simple. My students are quite capable of .0015*$1.4 million.)

What was actually lost to Minnesota was merely the $48,475 to the state coffers from the state sales tax, plus the profit margin that John Wiese or some other dealer would have made on the trucks, which if Flatiron is as skilled at buying as it is at bidding isn't more than $1000/truck. A far cry from $750,000, not likely a tenth of that.
Even with a generous fleet discount, we are talking a million dollars. While that may be a drop in the bucket on a $234 million project, a million bucks means $65,000 in lost sales taxes, which could have helped MnDOT add, who knows? Maybe a bridge inspector!
This is sheer demagoguery, of the same type as Don Boudreaux points out in Barbara Boxer's complaint that the war in Iraq makes fighting California's wildfires worse. Losing sales tax revenue makes lots of things more difficult to buy. You can say the same about resources consumed to fund the DREAM Act or bike trails. But of course you won't, because that's not your hobby horse.
Yes, but it's a MnDOT project. About the only surprising thing to me is these new trucks aren't on fire.
What the hell is it with Coleman and fire, anyway?

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