It is such a weird disconnect:
This region must remain competitive, and be the place to do business. That means paying attention to all manner of infrastructure: education, transportation, communications, and public health and safety.
The Seattle Times editorial board urges the region to “pay attention” to public infrastructure, while continuing to be one of the loudest voices obstructing our ability to pay for it.
The ed board has repeatedly opposed measures to raise state revenue to fund education, while dedicating itself to abolishing an estate tax that helps fund schools. Most recently it has campaigned against King County Metro’s efforts to seek new revenue sources, dishonestly attacking the transit agency in a way that can only provide fodder to Republican legislators intent on starving it. And yet the editors have the gall to opine on the importance of maintaining public infrastructure?
Public infrastructure is built and maintained with public monies. If the editors truly believe infrastructure is so important to keeping our local businesses competitive, perhaps they should use their influence to urge local businesses to help pay for it?
This excellent point ought to be overtly asked of such editorial boards (even beyond this brave article); their dissembling would be ‘edit’ifying.
[semi-aside] I always wanted to see a public domain simplified version of “SimCity”, The Revenue Edition, toward which to direct bold champions of new city efforts which entail costs. For instance, if you get universal funded “pre-K” (which few would deny would be a great thing) what do you cut to fund it? (“city-council wages!” “there’s always fat to cut in the system!” “secret entitlements to developers!” “stop building community centers in the central area!”) most would be surprised to learn how little wiggle room there is there. so yes indeed fund good projects, but at the same time seek more and equitable revenue to fund them.
@1 Years ago I sought funding to build “TimCity” in response to one of Tim Eyman’s stupid initiatives in order to demonstrate the same thing. Couldn’t get progressive backers to bite.
@2 such an online project ought to be a priority of the City Council Communications director! and ought to be funded by… uh, uhm…
well, even if a well-respected oft-visited local website were to semi-regularly publish, and heavily annotate the major items, a break-down of the city budget (hint: its cost is mostly policing and revenue is mostly via business tax) that would be a good start. because starting from this point: http://www.seattle.gov/citybudget isn’t going to convince any fist-shaking citizen of anything.
Wise words, Goldy, but you might want to tell them to Carl and Lee, who spent this post arguing Seattle should ignore basic infrastructure maintenance, and instead spend hundreds of millions of dollars in civic bonding authority to screw over fans of the Sacramento Kings.
@4 It doesn’t work that way. The arena proposal relied on a revenue bond. Without the revenue, there’s nothing to bond. And without the bond, there’s no money to spend on infrastructure maintenance.
Now if you’d like to propose a tax increase of some sort to pay for maintenance, we could bond against that to speed things up.
tensor @ 4,
They did not argue that Seattle should ignore basic infrastructure maintenance. You discredit yourself by this misrepresentation.
I suggest that you get treatment for your FOS (Fucking Obsession Syndrome). No one w/o your malady gives an F about the Times. Unless they change their stripes and hire someone with an IQ over the hereditary limit imposed by The Family, nothing interesting is ever going to appear there.
I recommend the following therapy:
1. Sudden and complete withdrawal. I am sure the rest of our DL friends will volunteer to email you next time the ST has Stuff to say that is worth your time.
2. When the urge hits, I suggest a good dose of porn. While I am sure you are at the age where porn is boring, foreign porn may just do the trick. I suggest a mixture of Swedish, Indian and Japanese.
@5, I know this is your house, but you’re wrong. The arena was to be funded by general obligation bonds (the final backstop being the general fund of the city) with a bunch of carve-outs that somewhat matched some estimated tax revenues. Other things aren’t exactly “revenue”, like the property tax bill the rest of the city/county would be paying on the arena property, which was effectively double-subsidy to Hansen from him not paying it but getting the increased collections that the rest of the city being kicked into the bond payments.
http://nosonicsarena.com/wp/?p=84
The Public Financing will include two installments of approximately thirty (30) year bonds or certificates of participation that have an effective cost of capital similar to general obligation bonds
The public financing would be in the form of Limited Tax General Obligation bonds or Certificates of Participation, with a duration of approximately 30 years. Under the proposal, the debt service would increase at one percent annually for the first 10 years, then level off for the remainder of the term.
“They did not argue that Seattle should ignore basic infrastructure maintenance.”
That’s exactly the argument they made, although they didn’t admit to it. Seattle did — and does — have a huge backlog of maintenance and upgrades to perform on our public infrastructure. Carl and Lee wanted $200M of public bonding authority diverted from addressing those pressing civic needs, and spent instead on a redundant sports palace. Seattle does not have an infinite capacity to issue bonds, so bonding authority spent on one project can’t be spent on another. Arguing for a sports palace was — and is — a de facto argument to ignore infrastructure maintenance.
I don’t know why Goldy bothers complaining about the Times’ something-for-nothing mentality, when having people express the same sentiment here is just fine by him.
@9 Did you just skip over my comment? Did you not read it? The arena would not have diverted money from addressing other needs, because the money from a revenue bond cannot be raised without projected revenue to bond against. The city can’t simply borrow money to address current needs without pledging a specific revenue source to repay the bonds.
Debt doesn’t work for state and municipal governments the way it works for the federal government.
@10
The city can’t simply borrow money to address current needs without pledging a specific revenue source to repay the bonds.
Um, don’t general obligation bonds do exactly that, based only upon the creditworthiness of the municipal borrower?
@11 Sigh. I’m using the term “revenue bond” broadly, as opposed to distinguishing between “Limited Tax General Obligation Bonds,” “Unlimited Tax General Obligation Bonds,” and “Revenue Bonds” (which technically are only issued by City Light and Public Utilities) — all of which are pledged against dedicated revenue. So the arena bond would be a Limited Tax General Obligation Bond, in that it was approved via councilmanic authority, not a 60 percent vote of the people.
Under the terms of the MOU, the city would issue $120 million in bonds, with tax revenue and rent from the arena pledged to meet the annual debt service. ArenaCo is required to pay rent sufficient to make up the difference between tax revenue and debt service, while keeping various reserve accounts in escrow. Further, the bond would be collateralized by ArenaCo’s assets—including the value of the franchise itself—while the city would actually own the arena and the land it sits on. Essentially, it’s the issuance of the bond that generates the annual revenue necessary to pay it off.
But things like seawalls and roads don’t work that way. They don’t generate revenue on their own. So the must be pledged against taxes. That means either doing a dedicated property tax levy, like we did with the seawall, or pledging against general fund tax revenue, which means the debt service would be money the city couldn’t spend to meet other needs.
So it is absolutely wrong to characterize the city’s proposed $120 million arena bond as diverting money from other needs. The only way it could diminish the city’s ability to meet other needs would be if we were so close to the state cap on percent of maximum property valuation (1.5% for LTGO bonds) that it limited our ability to issue bonds for other purposes. But we’re not near that cap.
I understand that it would be comforting for you to believe that I am just a baldfaced liar who makes shit up. But I know what am talking about.
@ 12
I did not allege that you lied. Not in this instance.
I also don’t believe a stadium or arena to be a ‘current need’; hopefully you don’t, either.
However, what you stated @10 was that the city can’t fund current needs without pledging a specific revenue source. That is not correct, and GO bonds that essentially state that the city can pay them off because revenue will keep coming in forever are a common way of securing general (read ‘current needs’) funding without pledging anything specific in return.
Other than that small inaccuracy I don’t disagree with you here.
1.5% limit by state law, 12% of that is reserved for emergencies by city policy. In 2012, the LTGO available was 640 million. I guess that’s a lot until they were forced to issue bonds to do something that wasn’t quite popular with voters (say, continue to build a cut and cover tunnel after the major players abandon a deep bore tunnel and there’s only a $500 million bond left).
http://clerk.seattle.gov/~publ.....229_2a.pdf
@14 Hah! You think the council would pass a $500 million LTGO toward building a cut and cover tunnel? No fucking way.
“@9 Did you just skip over my comment? Did you not read it? ”
I have the exact same question for you about the correction made @8.
The idea that Seattle can just issue bonds for a sports palace without impacting the city’s ability to meet other needs is the very definition of “something for nothing.” Hansen and his gang wanted access to capital at rates more favorable than they could get on their own, and a large city like Seattle can obtain capital at such favorable rates. But that ability is finite, and there is no good reason to use it on subsidizing a redundant sports palace when we have other needs.
@16, ballmer just spent $2 billion on a team that may or may not be in litigation for a while. It’s not that the capital was ever an issue, they just wanted a mechanism to issue the project 30+ years of tax refunds.