Your Tax Dollars & Private Industry - Valley News Live - KVLY/KXJB - Fargo/Grand Forks

Your Tax Dollars & Private Industry

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Months ago the City of Moorhead changed the newspaper they use as their newspaper of record where they publish notices. This change is a way to help save the city money, but many people have questions about how much of your tax dollars are being spent on public notices in newspapers. Valley News Team's Ashley Bishop investigated why millions of your tax dollars are being spent on publishing items in newspapers when there are plenty of other free options available.

The old fashioned newspaper. For decades it has been a staple around the breakfast table and coffee shops detailing the previous day's events. But, it's been documented and reported numerous times that the newspaper industry is dying.  According to the Newspaper Association of America the newspaper industry has not shown a profit since 2005, and most people do not even use the newspaper anymore when it comes to getting their news and shopping ads.

"I use the internet because it is on my phone," said one man. "I use both at times but the internet more," said an older women.

"It is popular in the past couple years for people to think that newspapers are dead they're an old world medium in a new medium world," says North Dakota Newspaper Association Executive Director Steve Andrist.

Steve Andrist is the executive director for the North Dakota Newspaper Association and his job is to defend the newspaper industry.

"Some people like to still sit down and read a newspaper in their hands," says Andrist.

So you the taxpayer might ask how a business continues to do business if their industry is collapsing. The answer isn't in subscriptions but in classified section! Now you have two types of classifieds; your typical ad which is placed by a regular person or business trying to sell an item or service and you also have legal notices also known to many as public notices.

These notices are issued by government agencies and are used to make the public aware of proposals before a law or decision is made. Some examples of public notices are bids, contracts, licenses and example ballots. Public notices are required to be published in newspapers in many states as a part of state law and that includes Minnesota and North Dakota. But more and more cash strapped states are looking for cheaper and easier ways to reach more people. Thirty states in the past year or years have recently looked at legislation which would give government entities the option to place public notices to online instead of in the paper to save money. Minnesota is the latest state looking to gain control of legal notices from the newspaper industry to save money. Their bill however died in committee during this legislative session and they are like various other states. 

"We want to be good steward of public funds but at the same time we want to have open and transparent government," say North Dakota Senator Mac Schneider.

"Were trying to as a legislator to get the public more involved in the process of pay attention," say North Dakota representative Al Carlson. 

But in the age of technology why are we still using tax dollars to publish public notices in newspapers when they could be published online for free?

"I will agree with you that hardly anyone even reads them. I mean I can't remember that last time I sat and read them in the paper. They should probably be in both places they should be online and in the newspapers," says Rep. Carlson.

"I don't see a big problem continuing the publication of these notices in newspapers across the state. I do think as a matter of ease for the general public that gets their information online, I do think it makes sense to publish these notices online format as well," says Sen. Schneider.

Despite ideas about publishing notices online state administrators to this day work hand in hand with newspaper insiders to set rates for how much cities and counties will spend with the newspapers. Here's how it works the North Dakota Newspaper Association tells the State Office of Management and Budget how much they think should be spent with their companies.

"After we agree upon a rate the OMB (Office of Management and Budget) reaches out to the newspapers and then calculates the rates for each newspapers," says state procurement manager Sherry Neas.

The rates that are set by the state are the rates that newspapers must charge and the rates cannot be raised by any of the 90 newspapers in the state. The state has 10 daily and 80 weekly newspapers. Mostly all being a paper of record. Most all getting tax payer money.

Forum Communications, owners of the Fargo Forum, is one of the biggest players owning six large newspapers in North Dakota and 19 in Minnesota.

But how many dollars are really talking about? Well let's look at three government entities for cities. In 2012, Cass county spent about $64,000 ($64,139.00 to be exact), Fargo spent $91,000 ($91,466.00) and the city of West Fargo spent over $24,000 ($24,963.84) on just publishing public notices. Now that does not include what school districts spend. In 2012, West Fargo school district spent $27,131.23, Fargo public schools spent $27,022.00 and Central Cass school district spent $2070.92

In one year, two cities and one county spent over $180,000 tax dollars ($180,568.84) on just public notices. In North Dakota there are 53 counties and 393 towns and cities. The costs can add up quickly.

Andrist defends the costs saying the rates for public notices are set much lower than typical advertisements.

"The display rates especially for bigger daily's the rates they get for public notices are way below than what they would get from Hornbachers in Fargo or local advertisers," says Andrist.

So to save tax payers money why doesn't the state just put the notices online? Well the legislature feels to many people do not do things online. 

"To eliminate the newspaper doesn't make any sense because there is still a lot of people today that don't do anything online," says Rep. Carlson.

But wait...According to the NDNA readership survey there are a lot of people reading the paper online.

"56% of the newspapers readers over age 55 have access their newspapers online," says Andrist.

If so much is activity is happening online wouldn't it make sense to save the tax dollars and only publish them online? The newspaper association says they do that already on their website they established; NDPublicNotice.com.

"Right now you can go on the website and search all the public notices that been published in the state and we do that for no charge as a public service because we think it is the right thing to do. Unfortunately it does not get a lot of traffic," says Andrist.

The website had 2,500 views from March 21, 2014 to April 21, 2014 but the website is not widely publicized by the organization. The NDNA says that if the state only requires the notices to be online that is infringes their rights as a business…

"Basically what the government is doing then is telling a private business that you have to incur a cost on behalf of the public to publish that. Some people might contend that we only support public notices because we make money off of them. And yes we do make money off them just like anyone else that make money whatever business they provide to the public," say Andrist.

North Dakota legislature have told me that this topic has come up in the past but has not gone anywhere. We did reach out to Forum Communications for comment regarding how money they are making off the notices. The North Dakota session is only 8 months away and it is not known yet if public notices will be talked about.

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