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Monday, October 6, 2008
Amendment No. 2 not good for future
The Atlanta Journal-Constitution
This is not about Atlanta. It’s about an issue on the statewide ballot in November. Atlanta, as the state’s largest mature city, is relevant because it offers a glimpse of the future for those who live elsewhere.
The ballot issue is a proposed constitutional amendment. It is listed as Amendment No. 2. The ballot language is this: “Shall the Constitution of Georgia be amended so as to authorize community redevelopment and authorize counties, municipalities, and local boards of education to use funds for redevelopment purposes and programs?”
It’s there because the people who get rich by getting government in debt came up with a neat new way to make long-term debt attractive to local politicians. It’s a means of converting tomorrow’s tax revenues into spendable money today. Politicians, of course, love it. The route to the amendment you’ll see on the November ballot started with an opinion by the Georgia Supreme Court on Feb. 11. The court ruled unanimously that taxes levied to educate school children cannot be turned over to private developers and businesses to be spent for other purposes. The other purposes are development, presumably of blighted areas. The concept is not totally without merit.
The law at issue allows the creation of Tax Allocation Districts or TADs. The presumption is that developers won’t go to certain blighted areas without financial inducements from taxpayers. If taxpayer subsidies lead them to redevelop blighted areas, higher property tax revenues will flow. So governments freeze property values for say, 25 years, borrow money on the expectation that higher property taxes from the improvements made will pay off the debt, and hand the cash over to preferred developers.
That’s the concept.
The problem is, though, that there’s no good definition of blight. So the definition includes areas in the path of growth that’s already occurring — around Centennial Olympic Park in downtown Atlanta, for example. When not used in a truly blighted area, it’s corporate welfare given by politicians who pretend, to themselves and each other, that they’re moving and shaking, making things happen.
The further problem is that somebody has to pay for educating the school children brought into TAD developments. The Supreme Court declared unequivocally that property taxes intended for that purpose can’t be handed over to developers for something else. Politicians, under pressure from developers and bond lawyers, invite you to change the Constitution to negate the Supreme Court ruling. But again: Somebody has to pay for those children. That somebody is others who own homes and businesses in the city or county. You.
The cost of any increase in demand for city or county services is also borne by those outside the districts.
Now to the Atlanta example. Owing to irresponsible choices Atlanta city and school officials made, its public pension funds are a mess.
The city’s budget is $570 million. Decisions made in 2002 increase police pensions by 50 percent. Three years later the city did the same for firefighters; other city employees got a 25 percent increase. The effect of those decisions were to raise the pension debt on Atlanta’s taxpayers from $620.5 million to $1.2 billion.
A school system pension fund that covers only 2,400 current employees and 1,000 former employees is in the hole by $510 million. It’s one of the most poorly funded in the state.
Meanwhile, Atlanta proposes to take $40 million from future tax revenues to jump-start a proposed $125 million Center for Civil and Human Rights near Centennial Olympic Park.
The city has horrendous debt. But for 25 years, the residents and businesses in TAD areas won’t share that burden except to the extent of today’s frozen property tax values. And while taxpayers may well wish to contribute $40 million to a Center for Civil and Human Rights, or any other project, the availability of money from anticipated-revenue bond sales makes it an easy call for politicians. The old-fashion way is to ask for voter permission first.
As with anything government does at any level, an OK idea for use in special circumstances becomes welfare for business and something politicians quickly abuse in their moving-and-shaking.
Much of what happened on Wall Street — like, for example, inviting people to buy homes they couldn’t afford — had some merit in limited circumstances.
Solve tomorrow’s problem today. Vote No on Amendment No. 2.
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Vote better food, softer mattresses
The Atlanta Journal-Constitution
Working people had better be registered to vote. Today’s the deadline. Otherwise, those who are in the wagon being pulled by their taxes may decide to vote themselves better food and softer mattresses.
Pulling out all stops in a presidential race that Barack Obama just can’t seem to put away, a group identified with the national Democratic Party is scouring the jails of Georgia in search of new voters. The Southern Christian Leadership Conference hopes to register a million of the jailhouse gang as voters.
In DeKalb County, 441 inmates were registered and another 376 were signed up for absentee ballots as of Friday, Sheriff Thomas Brown said. About two dozen were registered in Athens and 15 more were assisted with absentee ballot applications.
Efforts are frantic throughout the country to register every known and suspected Democrat. The latest Zogby poll explains why. Despite circumstances and events in the economy that constitute a gift to the Democratic nominee, Obama cannot put it away. His lead in the polls is 4 percentage points, 48-44. The economy is the top concern to two-thirds of the likely voters. As a measure of how quickly concerns change, the war in Iraq is now the top concern of just 4 percent of likely voters in the Zogby poll.
As we all knew they would, the Hillary Clinton voters remain loyal Democrats; 88 percent of Democrats support Obama. Among Republicans, 87 percent support McCain.
Based on Governor Palin’s observation that Obama has been palling around with bad company, Republicans are expected to return to the character issue. But they still have not made the case, as they should, that Fannie Mae and Freddie Mac might have been reformed earlier had it not been for Democrats. It’s let up to others to make the case. (Some of the best political commercials of this cycle have been on YouTube.)
Zogby’s finding on the Sarah Palin-Joe Biden debate is that while most though he won, only 4 percent said they changed their minds on which ticket to support. One recent poll in Georgia has just 2 percent undecided. Quick question: When was the last time you met somebody you thought was actually undecided on this race? I don’t think they exist.
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