Friday, June 08, 2007

Decline & Taxes

They say there's only two things that are certain, death and taxes. This edition looks at the slow decline of a city and rise of taxes. A few months ago one of our regular readers, an individual who goes by the name of “Moderate Man” wrote a terrific article on the need for taxing districts. He followed up with another compelling article a short little while later. Well, Moderate Man is back, and this time he’s talking about the decline of the Louisville’s population and businesses. I thought it was an article you’d enjoy reading and commenting about.

I also received a “public service” advertisement from community activist and real estate broker, Paul Holliger. Paul has been active for years in Louisville’s Southend as a public watchdog. Another experienced community activist in the Southend is Ray Pierce. Ray has been more than just a watchdog; he’s been a bulldog when it comes to MSD. Paul and Ray have teamed up over a recent proposal by MSD to raise our rates. There’s an open meeting to public on Monday, June 11th to discuss the rate hike. If you’re concerned about your water bill, I urge you to read Mr. Holliger’s notice and attend the meeting at the Government Center on Dixie Highway on Monday, June 11th starting at 6:00 PM. After you’ve done so, come back to Another Opinion and let everyone know what you think!

Finally, as before, the perquisite disclaimer: The opinions expressed in these two articles are solely those of their respective authors and not necessarily those of the Another Opinion and/or its editor. So without further adieu, enjoy!

Where Have The People Gone?

Metro Louisville has lots of needs for a 227 year old town, the 16th largest in the country. It takes money and people to fulfill those needs, keep the citizens here to raise families, grow old and enjoy a good quality of life. According to the census, from 1970-2000 the Jefferson County population has decreased .2% from 695,055 in 1970 to 693,604 by 2000. By 2005 it grew to 699,827. That’s a net increase of only .7% in over a quarter of a century. Where have the people gone? Why are they not moving here? Why are citizens moving away? There are lots of reasons and explanations. Aging population, conversion from manufacturing base to service industries, busing, labor disputes, no right to work status, Fortune 500 headquarters lost, tax rates, political duplication, education, etc. The voters took a gamble with merger to try to break out of the population stagnation. It wouldn’t do for Lexington to have the largest population in the state. Louisville’s pride was on the line. It remains to be seen just how successful merger will become. It may take 50 years to find out. After decades of under funding roads, infrastructure, education, parks, etc., the voters now have full elected representation. But not the money needed to make up for the lack of capitalization of those deferred items. Metro Louisville now has to think outside the box to attract and keep citizens. They have to be exciting and different. And I’m not talking about casino gaming. Sure that money is nice, but if State government wants to balance its books, it needs to do it the old fashion way. Cut spending and raise taxes. No, I’m talking more about the perception of being a “hot” city destination with a quality of life unsurpassed anywhere else. It’s kind of like build it and they will come philosophy. Some ideas that come to mind are: a pro basketball team and arena, grand prix auto racing on the downtown streets, huge signature metal sculpture like the St. Louis arch or the New York Statue of Liberty, 3 new bridges over the Ohio River (includes the 2 under planning), a water taxi to Southern Indiana, dedicated taxing districts for the library, parks and arts, a true international airport, light rail, horse races on Main Street, more Fortune 500 headquarter relocations, Golden Gloves tournaments, a Submarine docked on the Ohio for museum tours, modern Hydroelectric city owned power plants, the largest factory outlet mall in America, all city vehicles electric powered, fully fund surveillance cameras throughout the city for anti crime uses, passenger train service to Chicago Il., factory plant public tours of General Electric and Ford plant. I’m sure you can add a few ideas, but you get the point. Our politicians are counting on their old “successful” methods for greatly increasing the population of Metro Louisville. There might not be enough citizens left to vote them out of office if they fail.

MSD Rate Increase

MSD RATE INCREASE proposed
PUBLIC MEETING
SOUTHWEST GOVERNMENT CENTER
Dixie Highway
Louisville, KY
Monday JUNE 11, 2007
6 - 8 PM


MSD director Bud Schardein will be leading this meeting, and he makes it very, very clear that he wants to RAISE YOUR RATES by over 65% over 4 years!

This additional SW Meeting was scheduled at the request of Councilman DOUG HAWKINS,
who believes that the Southwest area was not given proper notice by MSD in April.

MSD contracted with the Courier-Journal to create an 8 page full color insert in the Sunday newspaper on April 29, 2007. In that insert the PUBLIC MEETING SCHEDULE was printed. The first meeting shown scheduled was on TUES April 24, 2007 at the Southwest Government Center. That FIRST MSD meeting was HELD 6 days before the public-at-large was notified through the Courier-Journal insert! As you can see, MSD failed to inform the Southwest community in a timely fashion.

A total of 4 persons (who were not MSD employees or contractors) showed up at that April 24 meeting, with an additional 2 persons from Councilman Doug Hawkins office in attendance.

MSD is NOT a city agency.
MSD is NOT controlled nor regulated by the Metro Council.
MSD does NOT answer to the Mayor.
MSD is NOT regulated by the Kentucky Public Service Commission.
MSD does NOT have to get anyone's approval to raise your rates 7% per year.
MSD answers ONLY to its own Board of Directors (who are all appointed by the metro mayor).
MSD currently has $2.7 BILLION in debt service (debt service is similar to a mortgage) (see note 2 below).
And MSD, under Bud Schardein, wants to add as much as $1.6 BILLION to that debt service/mortgage.
MSD pays $1.07 in interest for every $1.00 it borrows, which means it takes $2.07 to repay $1.00.
MSD repays TWICE as much as it borrows!So we, the ratepayers, actually receive only HALF as much in actual benefits as MSD announces.

And if that's not enough ...

MSD's drainage service area covers only about 67% of Jefferson County:
this means that only about 67% of the land might ... might be paying the MSD Drainage Fee/Tax.
MSD also does NOT provide sewer service to about 30% of the land in Jefferson County.
All of this means that MSD is collecting their fees from only a portion of Jefferson County residents.
Some Jefferson County residents DO NOT PAY MSD anything at all!
ONLY those who NOW PAY MSD FEES are the ones that will be FORCED to pay for all this MSD debt, both current and PROPOSED.

MSD has spent less than $123 million on drainage projects COUNTY-WIDE under a program called Project DRI. The Southwest has received only a modest part of that amount. (http://www.louisvilleky.gov/Mayor/News/2005/Project+DRI+Improving+Neighborhood+Drainage.htm)

Yet virtually ALL of this PROPOSED NEW debt will be spent within the OLD CITY LIMITS.
Virtually NONE of this PROPOSED NEW DEBT will be spent out in our areas, THE FORMER SUBURBAN COUNTY area.

PLEASE ... consider attending this ADDED meeting on Monday June 11, 2007.

Thanks.

Paul Holliger
South End Supporter &
Member of STOP I.T. (Invisible Taxes)

(STOP I.T. (formed in 2005) has been working to identify taxes being "sold" by various agencies as "fees". Since 2005. The MSD "drainage fee" is a prime example of such a hidden tax. In fact, we call that "fee" the "rain tax".

STOP I.T. has extensively studied MSD and has determined that MSD NEEDS greater oversight and accountibility. In 2007, STOP I.T. was successful in getting legislation introduced in the Ky. General Assembly to bring greater oversight and accountibility to MSD.)

(Note 1:
(http://yosemite.epa.gov/opa/admpress.nsf/b1ab9f485b098972852562e7004dc686/d099dfec771c4cc785256fee00750c86!OpenDocument)

(Note 2:
On page 37 of MSD's 2006 Comprehensive Annual Financial Report
the TOTAL DEBT SERVICE is listed. It EXCEEDS $2,700,000,000.00.
Only MSD rate payers will be forced to pay this enourmous debt. http://www.msdlouky.org/aboutmsd/pdfs/cafr2006.pdf .
So, Just how large is this number?
Louisville could build SEVEN (7) ARENAS for this amount of money!)
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3 comments:

Jeff Noble said...

Paul:

First, thank you so much for including my blog - Ohio River, Left Bank, Milepost 606 - on your listing. I very much appreciate it. My being on the "left bank" is, I suppose, serendipitous and appropriate.

Second, your current entry asks a few questions on population (among them "why aren't they here?") then, perhaps inadvertently, addresses a second topic - taxes - which truthfully answers the question.

The very simplistic sounding (although it isn't simple) answer to the question "Why hasn't Louisville grown?" can be answered in the discussion on taxes. Since the late 1970s, governments all across America have been in a down-sizing of taxes mood. I have written several times about the malaffects of Grover Norquist and others who believe that the smallest government is best. You will recall the Prop 13 initiative in California in 1978. It began a revolution, which Ronald Reagan took nationwide or at least he suggested that he did - in reality, the Tax Increase of 1983 was, at the time, the largest ever, enacted with the help of Democratic House Speaker Tip O' Neill and Reagan's legacy as a tax lowerer is honestly pure myth, the proverbial wool pulled over a nation's eyes by the Great Communicator himself. The revolution was that of either capping or lowering property taxes, thereby depriving governments of the ability to keep up with the cost of living (maintaining infrastructure) without putting such measures on the ballot. In Kentucky, this was known as House Bill 44, a measure which caps property tax increases to 4%, without some form of ballot initiative.

As needs grow but revenues do not, governments are affected in real and noticeable ways. Infrastructures are neglected, schools fall behind, cracks in the roads become potholes, and the result is clear - no one wants to come here. Meanwhile, elsewhere, where the Prop 13 mentality didn't take hold, progress is made and it is in those places where populations have increased.

As long as we have artificial controls - known as laws, approved by the legislature - on the ability of government to expand and keep up, and politicians whose only role seems to follow and not lead, Louisville and Jefferson County will not and can not grow. It is under the efforts of people like Mr. Price, about whom you have written, who I know and respect although I very strongly disagree with him (and have told him so on occasions, most recently last summer in Valley Station at Our Lady of Consolation's picnic), who wish to limit government and everything about it that Louisville has not prospered as other cities have elsewhere.

I agree with Mr. Price on the merits of keeping a close eye on MSD and other government entities (especially MSD which has a quasi-government status), but to limit the ability of school districts, fire districts, and every other government entity, including the Metro, to properly maintain and improve its internal and external agencies of government is, frankly, the geneses of anarchy.

Folks who are against every tax, as Mr. Price, Ms. Faye Ellerkamp, my old friend Tommie Riddle (for whom I served as a Page in the Legislature when I was 8 years old) and others are well-known to be, are the real proponents of anarchy among us, not the goth-looking kids dressed in black with the "Circled A" tattooed on their foreheads. I am more afraid of the effects of these no-tax-increases-for-any-reason advocates than any strange but basically ineffectual punk,goth, or anarchist-wannabe. Whenever I hear a candidate whose mantra is "No New Taxes," or one who signs Norquist's silly "No New Tax" pledge, I immediately dismiss them as non-leaders and remove them from any possibility of receiving my vote. They are effectively saying "I don't give a damn about the government I want you to elect me to and receive a paycheck from." They do not deserve my vote and they will not get it.

As you know, we had this discussion back when Moderate Man (who has since revealed his identity to me, which pleasantly surprised me), made his entry on Big Steps. As you also know, this was followed up on my blog with some comments, and now there has been the very lengthy and studied commentary by our friend Ken Herndon in last week's paper.

Until the Mayor and the 26 members of the Council, as well as the governor and the 138 members of the General Assembly, and finally the president and the 535 members of Congress, discard the no-new-taxes mentality of Ronald Reagan, not only Louisville, but the state and the nation will continue to devolve, and the end result, whether in the next ten, fifty, or one hundred years, will not be pretty.

Jeff Noble

Another Opinion said...

I remember reading once, when I was a child, about the causes leading to the fall of the Roman Republic. One of the first outward signs of its pending decline was its crumbling infrastructure, most notably it famous road system, because of the fear in raising taxes to keep the roads, and later, its aquaducts, temples, public houses, drainage system, etc in good repair. The people were so tired of government mismanagement that the thought of tax increases gave real concern to the Senators of a people's revolt. So many politicans declared "no new taxes" if you will and looked for ways to "rob Cicero to pay Cato" (pardon the pun) and so the cycle of decline continued (of course, this was just one area contributing to Rome's slow fall).

I don't think voters are against tax increases or "new" taxes per se. They just want to make sure there's a genuine need and the money goes for that particular project, and the money is used wisely. There has to be need and accountability.

And by the way Jeff, you're more than welcome.

Ed Springston said...

That is the real rub when it comes to taxes. Accountability. No one I know would complain about paying their fair share of taxes if used as intended. Unfortunately, the only thing we know for sure today is when taxes are raised for projects our elected leaders will find a way to chew most of it up in overhead costs and hide pork throughout so only a minimal amount goes to where it was intended.

Want to fix that? Elect new leadership and get rid of the followers. Until we decide we are tired of being sheep nothing changes.

Ed Springston