Tea Party self-appointed leader Robert Rowland sides with Democrat Whistler on Elbert County Proposition 1A.
ELBERT COUNTY FINANCIAL WOES
by Robert Rowland on Thursday, October 14, 2010 at 1:30pm
WE NEED EVERYONE IN ELBERT COUNTY TO SEE AND READ THIS, PLEASE PASS ALONG. ELBERT COUNTY – BALLOT INITIATIVE 1A The county commissioners are asking voters to approve borrowing of up to $20,000.000.00 to be used for road and bridge projects. They propose to use the 1% sales tax approved by voters in 2008 as collateral for this bond. Supporters say this money can be borrowed without raising taxes because they will use the revenue already coming in from the sales tax to make the payments. Elbert County currently has a 7.3 million dollar outstanding loan with Wells Fargo, which was secured in 2009 by using the Justice Center and county water rights as collateral. The current payment on that loan is approximately $600,000.00 per year and is set to balloon to over 3 million dollars per year in 2015, with a total payout of over 50 million dollars. If we approve this 20 million dollar loan it will result in our taking on an additional 2 million dollar payment, resulting in payments due each year, beginning in 2011, of 2.6 million dollars. In 2015 our total payments for these two loans will increase to over 5 million dollars, or 58% of our total current revenues. They are asking us to approve a term of up to 40 years, resulting in a total cost of 81 million dollars. The actual revenues from our 1% sales tax is about 1.3 million dollars, short of the $1,950,000.00 cited in 1A, and those dollars are currently going into the road and bridge annual budget. Approval of 1A would use this revenue as collateral for the loan. Banks generally will only loan 80% of the actual proven sales tax revenue amount. Therefore, the county could only borrow about 10.4 million, less than the 20 million they are asking us to approve. Using standard amortization assumption and still assuming a 40 year loan at 10%, the payment annually would be approximately 1 million dollars. This would still result in total debt payments of about 1.6 million now and over 4 million dollars per year beginning in 2015. If they then used all of the 10.4 million dollars borrowed in the first year as stated in 1A, at the end of the first year we would have spent the money, and the current 1.3 million coming in from the 1% tax and going to the road and bridge budget, would then instead be going to the payment of the loan. We then would not have access to these funds for additional projects beyond the first year. Proponents argue that the sales tax revenues could increase as the economy improves, but that is simply hopeful speculation. If we approve 1A now, and even if they borrow less than 20 million, they can then borrow again later, if conditions change, without asking voters first, , and of course we have no guarantee which projects or roads would be funded with that additional borrowing. We now have this 1.3 million in sales tax revenues available each year to use for roads and bridges, clearly not as much as we want or need, but it’s a steady and reliable income source. If we borrow against our sales tax, then spend it all in one single year, what happens after that first year when we need the 1.3 million that is now being used to make the loan payments? Initiative 1A also does not tell us which roads the money will be used for, and some language seems to indicate they could use the money for other purposes. It states that a 20 million loan would be used for 34 miles of Elbert County roads, so we can assume a 10 million loan will only do 17 miles. We all want our roads improved, and we all know that future economic growth depends on good infrastructure, but this kind of additional debt will burden taxpayers and residents for years and may limit our ability to plan and respond with other projects that will attract business in the future. VOTE NO on 1A We can’t afford this kind of debt! Robert Rowland, Elbert County Resident