L. Necio - 10:58pm Mar 10, 2001 Central (#73 of 77)

Ajax wrote: "The valuation of your house and taxes keep going up specifically as a result of our tax base dying. The city must squeeze every dollar it can because we are not growing. Appraisal District employees must value property as high as it fundamentally can to meet revenue requirements."

That's half true. Property tax bills have been going up in Texas because real estate values keep rising. Most taxing jurisdictions raised property tax rates steeply to stay even when the bottom dropped out of the real estate market in the 1980s. Subsequent elected officials everywhere have been able to brag that they didn't raise taxes ever since.
They didn't have to -- and in some cases, they even lowered them -- because as the real estate market recovered, property values increased and so did tax revenues.
What's so hard to understand?

Ajax later says that the developer will buy the bonds, something I haven't heard the developer say or promise. That's unsubstantiated sales pitch. But if he will, why doesn't he simply set up a tax improvement district (such as the one downtown property owners did) and tax his own property for his own benefit without sticking all other taxpayers with all the other added costs for providing added services, drainage, streets, etc.?
But there is another factor to consider: Interest rates increase with risk.
If the TIF issues bonds aren't backed by anything, the interest will be at junk bond rates, or extremely high, and that will mean that retirement of the debt will take much longer, and until it is, that debt will keep any incremented values of this dream project off the tax rolls, even if the participating taxing bodies will have to service the area - for free and at the cost of all other taxpayers.

What's so hard to understand?
To say that there is no risk to taxpayers is naive. If any taxing entity forfeits on a bond issue, all participating taxing entities, and all neighboring jurisdictions will see their credit ratings drop, which will raise interest rates for all subsequent bond issues.
There's no tooth fairy and no free lunch.
If it is economic development people want, a far better way to invest $10 million and change the Coastal Bend's future economics is to put it in an endowment dedicated to providing university scholarships for local kids.
If the endowment gives away only 90 percent of its earnings on scholarships -- and never the principal -- and puts the unspent 10 percent back into the endowment, and gets a private foundation to administer the scholarships at its own cost, it will be able to give away $630,000 in scholarships on the first year.
And that amount will keep growing and delivering more scholarship money -- forever!
Ask any Fortune 500 CEO and he will tell you that the greatest and most effective economic development tool -- and attraction for high-dollar jobs -- is A LARGE, WELL-EDUCATED WORKFORCE.

No smoke, no mirror, no hustle, no hucksters.
Just the reality of the 21st century and grandkids that will tell their grandkids about your wisdom.

What's so hard to understand?