Iredell County rejects the Charlotte rail line.
Here is my letter congratulating the Iredell County Commissioners for their 5-0 vote against this latest "all-cost-no-benefit" rail project.
Dear Iredell County Commissioners:
I noticed with great pleasure your courageous 5-0 vote against paying to extent Charlotte’s red line north to Iredell County. You are exactly correct. The transit planners and consultants always overestimate the ridership and underestimate the costs. This fact is shown by the 2002 statistical study by Danish professors Bent Flyvbjerg, Mette Skamris Holm, and Soren Buhl. Their conclusion is below and I have linked their entire study.
I also wish to point out two John Locke Foundation transit studies linked here:
"City and County Issue Guide 2011: Public Transit"
https://www.johnlocke.org/site-docs/research/2011issueguide/11publictransit.html
"Public Transit in North Carolina"
https://www.johnlocke.org/research/show/spotlights/250
Again, thank you for your action and if we can be of further assistance, please contact me.
Michael Sanera
Director of Research and Local Government Studies
John Locke Foundation
"Underestimating Costs in Public Works Projects: Error or Lie?"
This article presents results from the first statistically significant study of cost escalation in transportation infrastructure projects. Based on a sample of 258 transportation infrastructure projects worth US$90 billion and representing different project types, geographical regions, and historical periods, it is found with overwhelming statistical significance that the cost estimates used to decide whether such projects should be built are highly and systematically misleading.Underestimation cannot be explained by error and is best explained by strategic misrepresentation, that is, lying. The policy implications are clear: legislators, administrators, investors, media representatives, and members of the public who value honest numbers should not trust cost estimates and cost-benefit analyses produced by project promoters and their analysts. (Emphasis added.)
— American Planning Association Journal, Summer 2002, Vol. 68, No. 3, p. 2
Here is the Charlotte Observer’s report on the vote.
Tax-increment financing fiasco
An op-ed by Scott Mooneyham takes the Republican legislative majority to task for not undoing the harm by so-called tax-increment financing (TIF):
The folks in Roanoke Rapids understand the harm [caused by TIFs].
For the next 10 or 20 years, they will be paying off $12 million on a boondoggle theater that they soon won’t even own. To pay off the debt, their property taxes will invariably be higher, their government services less robust.
It could have been worse. The town’s City Council — whose members are mostly new after the old ones were booted for the poor decision — reached an agreement to sell the theater to a private investor for $7 million. The theater was originally financed for $22 million, but in a buyer’s market, you take what you can get. …
What legislators should do is try to prevent future harm to other local taxpayers the next time a snake oil salesman comes peddling a tax increment financing project to some other town desperate for jobs and economic development.
Of course, Carolina Journal broke this story back in 2005 and has documented all of the sordid details since. Here is CJ’s full list of the stories.
For a national perspective on TIFs, Cato’s Randal O’Toole provides the report "Crony Capitalism and Social Engineering: The Case against Tax-Increment Financing."
Cary loses school impact-fee case
As reported in The News & Observer, the state Supreme Court ruled that the town of Cary illegally required developers to pay school impact fees as a condition for rezoning. After about 10 years of litigation at a cost of about $750,000 to Cary taxpayers, the town of Cary will return $800,000 of the $4 million it collected to the developers. Two additional suits are still pending.
It is unfortunate that the court did not take the next step and rule that using rezoning to extract funds from private citizens is tantamount to extortion.
See these Locke Foundation reports on impact fees and adequate public facility ordinances (APFOs):
-
"Raleigh’s Flawed Impact Fee: Incomplete Research Means Proposal Is Broken from the Start"
-
"APFOs Research Fatally Flawed: One-sided analysis is used to determine ‘voluntary mitigation’ fees"
Raleigh risks taxpayer money by making risky loans
If you have a new or existing business in downtown Raleigh and you cannot get a loan from a bank because you are a bad credit risk, you can get $50,000 from Raleigh taxpayers. According to WRAL, downtown businesses can get low-interest loans if they "demonstrate management ability and experience" and "are unable to secure financing from financial institutions."
I guess I am confused. If city bureaucrats are qualified to be judges of management ability and experience, perhaps they should be working for banks. Additionally, if the business is turned down by a bank, isn’t that the number one reason why taxpayers shouldn’t be made to loan it their hard-earned money — because it’s a credit-unworthy business?
Click here for the Local Government Update archive.