Thank goodness MLTNEWS.com is not just an advertising medium, because citizen opponents don’t have the bankroll to pay for banner ads like the well-connected proponents do. In their current ad, one of their supposedly exploded myths concerns the cost of this Bond to a typical household.
Where’s the myth? What opponents of Prop 1 are making note of to voters is the many numbers the city has been using as the “typical household value.” We haven’t used three different numbers in less than a year; they did. If that confuses any one, how are we responsible?
We also did not construct their Levy Spreadsheet. What that Spreadsheet should do is exactly what their most recent explanation erroneously claims it does. But, if the proof of their assertions are buried there somewhere, they should explain them to us rather than insisting we take their word for it. If you study their spreadsheet you won’t find any confirmation of their $122 average, let alone a decrease from the initial $164 annual tax increase.
It is correct that as new development happens, every thing else equal, each home’s tax liability for this bond should go down. But look more closely at the future their mathematical model describes and you’ll find that not everything else is equal. In this future, we already know from the presumptions in their rent vs. ownership graph that the underlying economy and, with it, all other city costs of operation will be rising from 3%-3.5% every year.
Their model shows the total assessed value of MLT going up by barely 1.5% per year except for every fifth year. In that fifth year, “some economic revitalization” of 5% occurs. Combining these two, over the life of the bond, the overall growth in assessed value is less than 2.4% per year. In their model, not ours, the cost of all other city operations will grow faster than our combined assessed value’s capacity to pay for them.
Every household will have an increased tax bill because “some economic revitalization” resulting in a 2.4% growth in assessed value will be unable to keep pace with the costs of our city government in general. The growth promised by their revitalization argument is insufficient to grow the tax base enough to counter the city’s rising cost structure. As a result, each household’s portion of the levy cost can not go down. At the same time every household’s responsibility to pay for other government costs will be going up. Taking more money from one pocket, while not from another still leaves taxpayers on the hook for more money.
What is most fascinating about this result is how closely it mirrors the quandary we faced long before the Town Center Plan once again promised the elixir of economic growth. Previous councils and maybe this one recognized that our primarily residential tax base couldn’t afford the ever-increasing costs of government operations. Therefore, we needed more economic development, aka growth. And thus was born the Town Center Plan. But like similar initiatives from the 1980s impacting other areas of town, the primary output has been and will continue to be more multi-family housing. This is a development type which, as many councils have long acknowledged, costs more in increased city services than it pays for.
This long-established circular reasoning and the resulting increased cost of city government to homeowners remains an unmentioned after thought, except in their Levy Spreadsheet. As long as it provides a smokescreen from behind which they get their Taj Mahal, no one at city hall much cares.