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Newspapers panic as new tariffs raise paper prices

Thomas Clatterbuck

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The US Department of Commerce is imposing new tariffs on Canadian softwood lumber imports. Softwood is used in many industries, and makes up the paper most newspapers are printed on.

What’s the issue?

An American company, the Northern Pacific Paper Company, complained that Canadian paper companies were being unfairly subsidized by their government. Unlike in America, the Canadian government owns most of the trees used by the lumber industry. Northern Pacific Paper believe that this leads to unfair subsidies of Canadian mills. Some have accuse the Canadians of “dumping,” or selling goods below their real cost. The proposed tariffs average 6.53 percent, and are designed to level the playing field with the American mill.

Unsurprisingly, the Canadian government objected to the new tariffs. They filed a suit with the World Trade Organization (WTO) over the proposed tariffs. According to Canada, the US was wrong to put tariffs on at all, and also miscalculated other factors in setting the tariff rate.

What does it mean for newspapers?

In the meantime, any business that prints on newspaper has gone into crisis mode. Paper is one of the top expenses at these businesses, and there’s no good way for them to use less or move to a different solution. Many papers are already operating on minimal profit margins; a major increase in expenses could prove devastating.

In the end, the fate of many print publications could come down to how the US Department of Commerce and Trump administration work out the difficult questions of international trade. What will be the net job impact from protecting the American paper and logging industries but raising paper prices for printers? Does a “free trade” agreement make sense when one side is getting government subsidies? And how important is this squabble in the larger scheme of foreign relations with our northern neighbor?

For now, printers will just have to wait and see how it plays out at the WTO.

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Senior strategist, statehouse reporter and political correspondent for Springfield Daily. Graduate of District 117 and UIS. Thomas covers stories in both Morgan and Sangamon Counties, as well as statewide politics.

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Local Airbnbs to City Council: let us pay taxes

Thomas Clatterbuck

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Who wants to pay more in taxes? Normally, business owners point to Illinois’ high tax burden as a problem, but some property owners in Jacksonville actually want to be allowed to pay more. One of these owners is E. Scott DeWolf, who runs an Airbnb location in Jacksonville. But when DeWolf went to the city to voluntarily pay the hotel motel occupancy tax, he was told he wouldn’t be allowed to do so.

Airbnb is a short-term rental service where property owners can rent out rooms or buildings that they own. DeWolf was joined by Professor Kevin Klein and Bryan Leonard to discuss the positive impact Airbnb has had on the local tourism environment. They shared how the experience they can create in their properties fills a niche that regular hotels don’t, and that this draws visitors from across the state and even some from over seas.

However, despite being an internationally recognized brand, Airbnb still operates in a legal grey area. Listings aren’t considered rental properties, because visitors have short stays like at a regular hotel or bed and breakfast. But they aren’t recognized as hotels either because they are otherwise residential properties. As a result, since the start of Airbnb, taxation has been an issue. While Airbnb has taken some voluntary steps to collect the occupancy tax, this collection has varied from jurisdiction to jurisdiction. To further complicate matters, not every area wants Airbnb to operate there. Adding new rooms may impact the viability of existing hotels, and adding new traffic to residential areas can disrupt neighborhoods. In Jacksonville’s case, Airbnb is not recognized as a hotel, which is why they cannot pay the local occupancy taxes.

It may seem strange that Airbnb operators would want this to change. Why ask the council to raise their taxes? There is a very pragmatic reason: if Airbnb locations do not pay the occupancy tax, they cannot advertise with the local tourism boards. This keeps them out of some of the main local referral networks. They cannot even leave brochures with the tourism board.

But their request is also driven by a genuine commitment to the community. These owners have heavily invested in building up their properties and enhancing local tourism. And adding more rooms is necessary for Jacksonville’s busiest tourism days. When sporting events take place, or the college host graduation, visitors often have to room as far away as Springfield or Lincoln. Building up a healthy community is good business for everyone.

In the mean time, DeWolf said that they were still willing to contribute to the community even if they cannot pay taxes directly. He personally offered to donate 5% of his sales, equivalent to the tax he can’t pay, to the Jacksonville Heritage Culture Museum.

You can watch their full presentation in the player above, and the rest of the city council meeting below.

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Washington Street redevelopment gets TIF support

Thomas Clatterbuck

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A new downtown hotel development took a big step forward at the Springfield City Council Meeting. DK Collection SPI received $7.65 million in TIF funding to incentivize their $56 million project. These funds will offset property taxes once the project is completed. Unlike some TIF projects, the hotel will only get the TIF benefit after the construction is completed and it starts to owe taxes. However, the developers said that this support was key to making the project a viable investment.

The development will be more than just a hotel, and will include both luxury apartments and various entertainment venues. During construction, it should create between 400 to 600 jobs, including 15 to 30 summer jobs for local youths. The site itself will employ 130 to 150 full and part time positions.

The council was very supportive of the new development. In addition to the initial jobs and investment, there are hopes that it will draw more conventions and visitors to Springfield. Although there were some concerns about adding competition, the extended-stay style of the new hotel was seen as filling a different niche in the tourism scene.

Parking was the only serious concern for the development. Springfield may have more downtown parking than many cities, but adding several hundred new jobs and visitors creates a logistical challenge. Existing parking companies downtown expressed their concerns about the potential displacement of people who currently park in the areas that will be redeveloped. Alderman Joe McMenamin echoed these concerns, and suggested that the council was moving too quickly to approve the project. McMenamin referenced the Hy-Vee TIF project, where he said taking more time led to better outcomes for both the developer and the city.

Other aldermen disagreed. Alderman Andrew Proctor said that he had received no complains or messages about the potential parking issue. Mayor Langfelder said that parking patterns shift over the course of the day, and that lots that are under-utilized at night could be looked at to alleviate any shortage. The developer also said that since the last meeting, they had negotiated with other property owners downtown and changed some of their designed, and had added a significant amount of parking to their plan.

After calling the question to end debate, the Council voted 9-1 in favor of approving the TIF funds. Despite voting against the measure tonight, McMenamin later said that he was fully in favor of the project, but not how the council had moved the issue forward.

You can watch the final discussion in the player above, or the developer’s initial presentation in the player below.

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Illinois launches veteran-owned small business logo program

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Finding veteran-owned local businesses will soon be easier.

The Illinois Department of Veterans’ Affairs is offering a sticker to qualifying veteran-owned businesses. Veteran-owned businesses that are registered with the state, and in good standing, can display the logo in their place of business.

The stickers will be released as part of their annual program that sets aside $300 million in state contracts that only veteran-owned businesses can bid on, Illinois Department of Veterans’ Affairs spokesman Dave MacDonna said.

“We want to raise public awareness about small businesses that are veteran-owned or large businesses that are veteran-owned,” he said.

MacDonna said that there are many small business owners across the state and this is a way for consumers to have confidence that they’re spending their money with one.

“We want the consumer to realize that they are a trusted and valuable part of the community,” he said.

The program will run in concurrence to the state’s annual Veterans’ Business program, which gives qualified veteran-owned businesses in the state access to more than $300 million in contracts.

For information about the program, visit www2.illinois.gov/cms/business.

Article by Cole Lauterbach with Illinois News Network. For more INN News visit ILnews.org

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