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    MIDWEST UPDATE

    North Dakota c-stores are fending off state mandates on alternative fuels, while Ohio dealers fight minimum wage amendment. Missouri and South Dakota face tobacco tax increases.

    By Hank Behar

    October 24, 2006 -- North Dakota is successfully holding off state mandates on alternative fuels (so far), while contending with big-box retailers selling below-cost gasoline. Ohio is fighting an amendment on higher minimum wages that wary watchers say contains hidden assaults on personal privacy. Missouri and South Dakota, in the meantime, find themselves brothers in arms against new tobacco taxes.

    "We've had great people working on our behalf," observed Mike Rud, president of the North Dakota Petroleum Marketers Association (NDPMA), recounting the success his association has had in warding off legislative mandates on alternative fuels. "Some of them have been the executives running our association, and some have been retailers who have taken the time to go to the capitol and speak to legislators, one on one. There's nothing like looking a state senator in the eye who's from your district and telling him how you feel on an issue. He...or she...listens."

    The issue is whether the state or the consumer sets the standard on what alternative fuels should consist of, and the NDPMA comes down firmly on the side of the consumer. "The public will let us know if they want 10 percent ethanol gasoline or 2 percent bio-diesel fuel; we don't think the state should make that decision, and so far we've been able to keep it [the state] from enacting those mandates."

    "But we're all for continuing research on alternatives," Rud is quick to add. "Ethanol and bio-diesel plants provide good jobs for our people, and open new markets for our farmers -- but we want to proceed cautiously, because if a 10 percent ethanol mandate were passed right now it would most likely lead to higher prices since the supply won't meet the demand. That's the problem they had in the Midwest during the peak driving season. Let's leave the matter up to the one who pays: the consumer."

    In the meantime, the state's petroleum marketers have another, more intractable problem on their hands: big box retailers. Last year five of them opened in North Dakota and to make up for sales below expectations, some are turning to gas as a loss-leader to draw shoppers in. "That's bad news," observes Rud, "since we're a sparsely populated state and gas retailers have a hard enough time competing for customers as it is. We tried getting fair competition legislation passed in 2005 which would have banned below-cost gas sales, but it didn't go through. It's an issue that will be with us for awhile, however, so we're working on a different approach, other than legislation."

    Ohio
    Most changes in the minimum wage are mandated by simply passing a law establishing a new pay level, but, not in Ohio. In the Buckeye State they're planning nothing less than a constitutional amendment that would increase Ohio's minimum wage to $6.85, with annual adjustments tied to the Consumer Price Index.

    A coalition of labor, civil rights and community activist groups filed petitions to put the amendment on the ballot, and, as expected, a rising tide of opposition has formed to fight the measure.

    Lora L. Miller, executive director of the Ohio Association of Convenience Stores (OACS), is a member of the opposition. "The proposal has a single sentence about raising the minimum wage," said Miller, echoing John Mahaney, president and CEO of the Ohio Council of Retail Merchants, "but the devil is in the details." Those "details" are buried in nearly two-pages of ambiguous language that Miller claims will create problems relating to issues of privacy for Ohio's workers and businesses.

    These are some of the privacy problems that Miller sees ahead, plus a few others:

    -- Private salary records that have always been considered highly confidential will be available to others because the amendment gives third parties broad powers to demand the pay records of Ohio employees -- all without the permission of the employees. "If you want your in-laws, neighbors and co-workers to know how much you make," said Miller, "this amendment is for you."

    -- Ohio businesses, including local and state government offices, will be forced to spend millions on record keeping that the amendment requires.

    -- Nearly 12,000 Ohioans will lose their jobs and the Ohio economy will take a $308 million hit if the amendment passes.

    -- In the end, the amendment will not benefit those it seeks to help, since 40 percent of the affected workers are teenagers; almost 66 percent are under age 24; and almost 50 percent live with their parents. Also, the average annual income of homes with a minimum wage worker is $52,000.

    Miller announced that OACS will work vigorously through the OTPPP (Ohioans To Protect Personal Privacy), to educate the public about the inherent problems with the amendment. In the meantime, nine newspapers have come out against it.

    Missouri
    The state of Missouri has wasted almost $1 billion in tobacco tax revenues since 2000 and its citizens are now facing an amendment to its Constitution that would levy a whopping 470 percent tax increase on tobacco products, if it passes, according to Ronald Leone, executive director of the Missouri Petroleum Marketers and C-Store Association. Specifically, the amendment calls for a tax of four cents on every cigarette, and a 20 percent increase in taxes on other tobacco products (OTP).

    "It's outrageous," declared Leone. "More than four out five dollars of these taxes aren't even earmarked for tobacco diseases or cessation programs, but instead will fatten the wallets of the proponents who are spending millions to get this amendment passed.

    "It will proportionately be the single largest tax increase in Missouri's 185 year history," added Leone, "and will put Missouri retailers at a competitive disadvantage with six of our eight bordering states."

    Leone points out that as part of the Constitution, the amendment will be cemented in place and cannot be modified by the state legislature without going through the process of putting through another amendment.

    Supporting Leone's position is a diverse group that cuts across the political spectrum, including Missouri Right To Life, Missouri Farm Bureau, Governor Blunt, Attorney General Nixon, House Speaker Jetton, Senate President Pro Tem Gibbons, House Minority Leader Harris, and both Senate and House Budget Chairs.

    South Dakota
    South Dakotans are also facing a tobacco increase: Presently they’re paying a tax of 53 cents per pack of cigarettes, but if the initiated measure up for a vote passes, that tax will go up a full dollar, while taxes on all OTP will increase 35 percent.

    "This is social engineering of the worst sort," observed Shawn Lyons, executive director of the South Dakota Retailers Association. "The purpose of taxation is to provide revenue for essential government programs; not to force lifestyle changes."

    "Besides," said Lyons, "only $5 million of the revenue raised by this tax will go to tobacco prevention and cessation programs, while $35 million will be given to Medicaid, education and property tax relief. We're all in favor of funding them, but not on the backs of a small segment of the population."

    "The state has never indicated a need for this tax." noted Lyons. "It's placing a totally unnecessary burden on South Dakota's citizens and we're firmly opposed to it."

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