Many times we see a bond referendum and people frequently defend it by saying it will not increase taxes. Well, they might be right for the first year or so, but in the long term taxpayers are on the hook for all bond referendums that pass. As I was looking through some local government budgets for the next fiscal year, I ran across something that spoke to this very argument:
In FY2007, City Council adopted a 2.67¢ property tax increase to fund three bond referendums (2006, 2008, and 2010). The three referendums funded a total of $551.0 million in transportation, neighborhood improvement, and affordable housing bond projects. The FY2007 property tax increase did not provide a funding source for a 2012 or subsequent bond referendum. The FY2014-2018 Capital Investment Plan (CIP) is supported by a 3.17¢ property tax increase from 43.7¢ to 46.87¢ dedicated to General CIP projects that invest in our community. The property tax increase will fund four General Obligation bond referenda scheduled for November of 2014, 2016, 2018, and 2020. The FY2014-2018 five-year CIP will be supported by two of these four bond referenda in 2014 and 2016. The third and fourth bond referenda in 2018 and 2020 will be reflected in future five-year CIPs beginning in FY2015.
Regardless of the city mentioned above, it is evident that even government officials admit that increases in property taxes are used to fund bond referendums. Sometimes politicians might claim this bond won’t increase taxes. But times change and recessions have impacts on city and county budgets. If a bond was passed in 2007 before the recession, you can bet that taxes had to be raised to pay for it due to the lower local government revenue during the recession in 2008 and 2009.
So next time you see a bond referendum on the ballot, think to yourself if it is worth a higher property tax bill. Oh, and the city mentioned above is Charlotte. That is an excerpt from their FY 2014 budget.
