“So two of Fargo’s richest citizens, Doug Burgum and Ron Offutt, want to build a large multi-use building in Fargo,” Hank Prellin writes in a letter to the editor in the Fargo Forum. “Interestingly, they want the taxpayers to provide them subsidy via tax incentives.”
Mr. Prellin doesn’t mention North Dakota’s hotly-contested gubernatorial race – the one taking place entirely among factions of the Republican party, as Mike Jacobs eloquently describes today – but he puts his finger on what could be a major obstacle to Burgum’s ambition in that race none the less.
On Sunday I wrote about Attorney General Wayne Stenehjem’s potential weak spot. Namely, the state’s shifting economic and fiscal position, something Burgum zeroed in on yesterday in a SAB guest post. But Burgum has a weak spot of his own, and it’s not just his dissembling answers to questions about sticky social issues he’s clearly uncomfortable with.
Over the years Burgum has received a lot of subsidies and incentives from the government. He’s also a very, very rich man. In fact, his personal success is a big part of his resume to be governor. Some might wonder why such a rich man needs the taxpayers to incent his business dealings.
Prellin, of course, is writing about the construction of a new tower building in downtown Fargo – called the Block 9 project and billed as what would be the tallest building in the state – for which Burgum’s company wants subsidies. “On Monday night, the Block 9 developers plan to ask the City Commission to let city staff work with the developers on possible tax incentives for the project,” WDAY reported last week.
It’s been estimated to me by a City of Fargo official that the project could get something in the neighborhood of $7 million worth of incentives.
In any other year that sort of thing would provoke only grumbling from the usual suspects. But this year Doug Burgum has put himself in the political spotlight. He hopes to win the Republican nomination for governor on the June ballot later this year and, let’s face it, given the sorry state of the Democrats if he wins there he’ll be governor.
Now people are going to care about these sort of incentives. They’re going to get a lot more scrutiny than they ever have before because someone who wants to be elected to our state’s top political office is on the receiving end of them.
I asked Burgum about this sort of thing – not the Block 9 project specifically but the intersection of his business interests and public policy generally – in an interview for a profile I published last month. “I don’t want to be tongue in cheek or flippant about the whole thing but some people have suggested that this is an issue and they shouldn’t vote for me,” he told me. “To me that means we should only elect governors who have only done all their investing outside of North Dakota.”
“The typical thing isn’t that you get a lot of wealth and plow it back into North Dakota,” he added. “I’ve been willing to basically put my money where my mouth is. I keep investing in North Dakota even when people tell me I could get better returns elsewhere. It’s better than some person who has no conflicts because they’ve never believed in the state enough to put money here.”
That was a good answer, I thought, but is it going to win over people who resent giving tax incentives to someone who clearly access to a level of capital making them unnecessary?
When tax incentives are invoked as policy they’re sold to the public as something to help start-up companies get off the ground. Not something which simply reduces the cost of doing business for businessmen who are already extremely successful.
As the race goes on, I’m certain Burgum will face more questions about the tax incentives he’s received, and his answers will go a long way toward informing how people vote on his candidacy.