Will Craig County mortgage its future for a community center?

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My friend Tyson Wynn has an editorial on WelchOK.com about tomorrow's special election in Craig County to extend a sales tax that currently expires in 2023 to 2040 in order to pay for a new community center.

You read that right: They intend to borrow against assumed revenues far into the future in order to build a building at the county fairgrounds, a building with no likely economic impact.

Further, the plan to build the "community center" is just downright bad planning. To fund this disaster, we're being asked to extend a tax that's not even set to expire until 2023. And the extension goes until 2040. And these people are bringing this to us with straight faces? The only thing crazier than this is all those credit cards Discover gives kids in college so they can be paying for tacos for 20 years. If the tax extension passes, they sell the bonds now, get the funding now, and build the facility now. Without paying a dime for it. And they won't pay a dime until 2024. Seriously? Is it really good economics to borrow $2.8 million that we won't even begin paying on for 14 years? Can you fathom what kind of interest $2.8 million accrues over 14 years? And it won't be fully paid off until 2040.

And why are we extending the courthouse sales tax instead of a voting on a new tax? Because, as a county, we're maxed out. We can't vote new tax; we can only extend an existing tax. Sometimes, you just have to stop spending money and get caught up before you buy a luxury item, which this "community center" certainly is.

Wynn goes on to ask what Craig County will do if, having maxed out its bonding capacity and committed sales tax funds far into the future, it is faced with a real emergency needing immediate funding. I'd add that there's no guarantee bond buyers will want municipal bonds backed with revenues decades into the future. They're likely to want premium interest for that level of risk.

I don't have a vote, but it seems like Craig County voters would be pretty foolish to vote yes on Tuesday.

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This page contains a single entry by Michael Bates published on May 10, 2010 11:52 PM.

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