The Spike that broke the people’s back

Paul Jacob
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Posted: May 09, 2010 12:00 AM

Governments, Thomas Jefferson wrote so eloquently in our Declaration of Independence, derive “their just powers from the consent of the governed.” This founding idea serves as the most fundamental precept of American governance. Yet, today it is regularly exiled from our politics.

The latest case is now playing out in North Platte, Nebraska, where city officials seek to scuttle a citizen initiative that residents petitioned onto next Tuesday’s ballot. A Lincoln County district judge offers a powerful assist by ordering that the votes on the measure cannot even be counted or reported.

Michelle Malkin

Good heavens, they wouldn’t want the public will to somehow become, er, public. Such knowledge could complicate city policies that continue to flout it.

At issue is the Golden Spike Tower and Visitors Center, a place I might want to swing by for a visit if I ever find myself in North Platte, Nebraska.

The Golden Spike Tower in North Platte, Nebraska, rises 8 stories above Union Pacific’s 2,850-acre Bailey Yard, the world’s largest train yard. You’ll enjoy a 360-degree panoramic view from the enclosed 8th floor viewing area, while the sights and sounds of the railroad below can be enjoyed from the 7th floor open-air platform. It’s a one-of-a-kind experience for railroad lovers of all ages!

Or, considering the politics, maybe it’s an experience I can miss.

Construction of the visitors’ center was completed in 2008 with U.S. Department of Agriculture loans typically reserved for development of rural agricultural resources. In fact, the USDA is specifically prohibited from funding economic development projects through this loan program. Furthermore, the city was too populated to be considered “rural” by USDA standards.

To get around that law, the USDA allowed the city to set up an independent non-profit corporation to manage the project, with the city agreeing to hand over the dough to make the loan payments using a newly created hotel occupation tax.

Local taxpayer activists argue that the City of North Platte was required by state law to submit the Golden Spike project to the voters as an “economic development” issue. The city contends the project is educational. District Judge John P. Murphy addressed this critical question of whether the government’s action was illegal with a resounding “Maybe.”

North Platte has now collected approximately $3.5 million from the occupancy tax, and yet payments on the USDA loan have so far only totaled around $500,000. The project has also inspired other spending: the city paid a tourism consultant $1 million to make predictions about the impact of the development. This leaves $1.5 million worth of taxpayer money unaccounted for. Concerned citizens seeking to discover what has been done with this money have had their requests blocked or denied by city officials and the “private” Spike organization.

Where is the transparency? Where is the accountability? That’s what the Western Nebraska Taxpayers Association (WNTA) wanted to know. And with no answers coming from their “servants” in authority, they decided to use their constitutional power of initiative to change city law.

The group drafted a petition with a new ordinance mandating that any excess occupation tax revenues, over and above the money to pay off the USDA loan, must be placed into the general fund for property tax relief. After a difficult petition drive, and subsequent legal battle, the petition measure was certified for the May 11, 2010 ballot.

But at the same city council meeting at which the solons reluctantly voted to put the measure on the ballot, they also enthusiastically voted to file suit to block the WNTA measure.

Once again, elected representatives sue those they allegedly represent to stop them from voting on an issue.

Not surprisingly, the city found a sympathetic judge. In his order, Judge Murphy spends nearly half the text arguing politics and attacking the taxpayer group as “self-appointed tax and economics experts and self-anointed guardians of the public purse.” He goes on to condescendingly lecture that, “Our government is based on a theory of representative democracy in which voters elect those individuals to make decisions for all of us. . . .”

In laymen’s terms? Get lost, peasants: Go play in traffic. We decide.

The city’s primary claim is that the petition’s substance was not valid under state law because it impairs an existing contract — supposedly the agreement that the city give all of the occupancy tax funds to the Spike Committee. But, intriguingly, there is no actual contract between the city and the Spike group mandating that the occupation tax revenue go to the Spike Committee. Instead, in a separate agreement allowing the city a purchase option on the Spike, there is language that an amount “equal to” the proceeds from the occupation tax shall be paid to the Spike Committee.

Judge Murphy acknowledged that the “petition has no effect on the obligation of the city . . . under the contract.” But argued “the referendum is clearly an attempt to amend and impair the obligation of the contract.” So, it is not the wording of the petition that runs afoul of the law, but the political desires of the petitioners, as interpreted by his honor.

A quite sensible factsheet produced by WNTA says, “Now that the Spike has been built, we want it to succeed, but with as little taxpayer’s assistance as possible.”

Success, however, may prove slippery. Last year, the Spike gang spent $250,000 on advertising and had fewer than 40,000 visitors. At an average entrance fee of $5.50, it would take over 45,000 visitors just to recoup that single cost.

But there is a much bigger issue than the economic insanity of tax-pilfering economic development boondoggles. There is the issue of due process, of a government run by the consent of the governed. That is under attack today in North Platte.

Last week, Judge Murphy went further than just ruling that the WNTA-sponsored ballot measure could not be enforced. He ruled that the votes could not be counted. So, the leaders of the WNTA are once again digging into their pockets and huddling with lawyers to seek a stay, to have the votes counted and to appeal the substance of the decision.

What’s happening in North Platte cuts deep. Once again, we have to ask, Who is in charge?

As Sam Adams, the father of our American Revolution, put it centuries ago, “Is it not high time for the people of this country explicitly to declare whether they will be freemen or slaves? It is an important question, which ought to be decided.”

There are some good people in North Platte who know exactly what Mr. Adams was talking about.