(no subject)

[arethinn]

Ok, I'm confused here. Election tomorrow. Measure B. City measure to issue $108 million of bonds to pay for a new library. Nothing unusual there. But then they want to levy a property tax in order to pay back the bond obligation. WTF not just do the tax, and use the proceeds directly? Since that would, you know, not also incur tons of interest? I mean, usually you see the bond alone, because people seem to think they can get something for nothing and issue bond after bond rather than doing the fiscally honest thing and just taxing themselves. But this is a pair of them. (I suppose I should at least be glad that they have provided some answer to the perpetual question of "but where is the money to pay back this bond going to come from?")

I'm supposing there's some legalese reason they can't, and it's not just that whoever drafted this measure is crazy, but it seems stupid. The impartial analysis doesn't say why it's this way, and there was no argument against the measure submitted, so no hints there either.

Comments

[heron61.livejournal.com]

I'm supposing there's some legalese reason they can't, and it's not just that whoever drafted this measure is crazy, but it seems stupid.

Given the various egregious property tax limits and property rights bills that the entire west coast have been bedeviled with for several decades now, I'm guessing that it's being done this way because there are laws preventing it from being done in a sane and reasonable manner. Oregon has its share of such rules, but when I lived in CA, I was amazed at how many your screwy state has.

[silussa.livejournal.com]

If they do the bond issue, they can get roughly 1/3 to 1/2 of what the property tax would generate over 30 years NOW.

As opposed to having to spend 10-15 years accumulating it, then a few more years for whatever increases in costs there had been in the interim.

Ideally, they would have started saving up for it 10-15 years ago so they'd have cash in hand...but people have trouble working that way; no reason to think government would do any better. Not to mention someone would have started complaining about "it's your money" and wanting to cut taxes to give it back. (comparisons to the first Bush campaign in 2000 deliberate)

[arethinn]

they can get roughly 1/3 to 1/2 of what the property tax would generate over 30 years NOW.

Like hell. Many houses in this jurisdiction are $1 million and up. Granted, that is market value and not the "assessed value" which is much, much less in most cases due to a state law which says assessed valued for the purposes of property tax can only go up by so much fraction of a percent per year unless the property is sold (vs. inherited) to another person. Under which law our own house is "worth" something like 10-15% of what it would actually sell for. But still.

In any case, the measure specifies a rate that will support the $108+ million debt, so it really sounds to me like they could have just eliminated the middleman.

[silussa.livejournal.com]

You can retire a $108 million bond issue over 30 years (assuming 6%),with a collection of $12.6 million a year. Assuming NO increase in property tax value.

It's a lot easier to get approval of a 1 or 2 mil tax rate then a 10 or 15 mil tax rate. Even if it does cost a lot more in the long run.

As the line goes, "humans are the craziest animals".