Let’s see, it takes a letter from the Charlotte Chamber of Commerce to the Mecklenburg County Commission for anyone to notice that the county — and city — is spending itself to oblivion. How perfectly Charlotte. The facts never speak for themselves, we always need some spin on them.
The Chamber is concerned about the size of the public bond issues that are headed for the November ballot because we are fast running up against our ability to pay for things. The details are all in the “debt affordability” Power Point presentation made by County Finance Director Dena Diorio last week.
In it Diorio noted that both Fitch and Moody’s view with concern the county’s debt burden, especially the fact that the county has already overshot its debt targets. That reality, recall, is the motivation to increase the per capita debt target from $3600 to $4000 and the percent of the county operating budget dedicated to debt service from 16 to 22 percent.
The reason for the ratings’ agencies concerns are clear when you consider that Mecklenburg’s per capita income and effective household buying power already slightly trailed other AAA-rated counties around the country in 2007. Another consideration, the county’s overall debt to market value ratio is already higher that other AAA counties like Wake, Forsyth, Guilford, and Durham.
Right now Meck’s debt burden per capita stands at $4400 compared to Wake’s $3000 and Guilford’s $2000. The percentage of the operation budget that goes to debt service is 18, Wake’s is 17, Guilford is at just under 8 percent. Needless to say, were the county to lose its AAA rating, borrowing costs would jump.
But into this reality rides almost $800m. in new wish list debt from the city and county. Something has to give. Hence the Chamber’s letter urging the commission to scale back the $560m. in jail and park bonds now in launch phase.
Ignore all the talk about what voters will or will not pass. That is not what the insiders are worried about. They know that fooling the public for one more election cycle is the least of their problems.
Bonus Observations: Do clip and save this little nugget, however:
Democratic Mecklenburg commissioner Valerie Woodard said she’s worried the size of the bond packages could hurt city projects, such as affordable housing. “(Voters are) just intimidated about voting for things that are going to raise their taxes,” she said.
[John] Lassiter said the city wouldn’t raise taxes to pay for its projects.
Interesting way for Woodard to put it, but at least a tacit admission that all this debt has a revenue impact. And does Lassiter’s statement extend to the property revaluation now underway? In other words, is Lassiter pledging the city to give back the increased revenue? I didn’t think so.
That is why this whole exercise is so dishonest. The pols see a windfall coming, and are knocking each other over in a race to spend it.
