The Perception of Deception
On September 1, 2017, the county executive was quoted in The Frederick News Post about many things she blames on the previous board of county commissioners. She uses perception of numbers to simulate that the sky is falling on several issues.
But, when you look closely at the real data, nothing could be farther from the truth.
The executive claims that the bridge over Route 340 at the entrance to the Jefferson Tech Park was “the largest bad deal and the largest taxpayer giveaway in county history.”
She said the interchange “could cost” $120 million in maintenance over the next 100 years. She changed an agreement made by the previous Board of County Commissioners so that the county will now take over 3.8 miles of dilapidated excess state highway roads and in return give the state highway a brand new bridge.
Now in case you don’t already see the flaws in this incredibly bad deal, I will put this in layman’s terms so it’s very easy to follow.
Let’s say the new bridge built by and paid for the developer is a brand new Cadillac. The 3.8 miles of existing 40-year-old state roadways are let’s say, a 1977 AMC Gremlin. In order to get the Gremlin to run, you have to put “X” amount of dollars into it, then in order to keep it running, you need to maintain it at a cost of “X.”
These roads are no different. They’re 40 years old plus or minus. So they need to be brought up to current standards which is not cheap. Also, every year now we have 3.8 miles more of roadway to maintain and remove snow, year-after-year-after-year. Whereas the new Cadillac you would spend zero dollars on repairs and maintenance is minimal year-after-year.
This goes for the bridge, as well. This bridge will require zero repairs for 50+ years and the maintenance will be minimal as well.
Another factor to look at is that most state highway bridges take a beating day-in and day-out, and they last 40-50 years with very minimal repairs and most will last 75-100 years until replaced.
This bridge into Jefferson Tech Park will service 825 homes as well as commercial tenants.
This bridge will take on minimal traffic loads unlike a bridge say on Interstate 270, and it will not require replacement until well beyond the 100 year mark.
So, what would you do, buy the Gremlin and own the money pit, or buy the Cadillac and keep your money in the bank?
Now for the numbers. This tech park subdivision will have 825 houses when complete. Let’s use a modest property tax on each house of $3,500 annually. That amounts to $2,887,500 annually from the property tax on the residential portion of this development.
If we use a ratio of 71% of the tax revenue (currently the income tax ratio to property tax is 71%) that adds another $2,050,125 of revenue.
Let’s use the county executive’s example of 100 years for the lifespan and add in these revenues and you’ll see that over 100 years (at current rates not adjusted for inflation) the county would collect just under $494 million. Keep in mind this does not include inflation, or any of the commercial users that will pay both property and income taxes.
So, the real number over 100 years could far exceed $1 billion in revenue. I think it’s safe to say we could afford to do some work on the bridge at that point.
A Tax Increment Financing (TIF) is simply a tool used to finance infrastructure. In this case a bridge and interchange off of U.S. 340. The developer initiates the TIF and issues bonds through the county to finance the improvements. It’s important to note the county is not responsible for these bonds, and this bond issuance does not go against the county’s debt affordability ratio. A portion of the tax revenues are used to then payback the bond debt over a period of time.
This Jefferson Tech Park Tax Increment Financing plan (TIF) is a great deal. It will bring jobs, housing and revenue to the county; and, if we spend it wisely, there’s no reason we can’t afford schools, roads, emergency services and law enforcement.
Don’t fall for the perception of deception. The county executive is throwing out big numbers in order to deceive the real numbers and overall benefits of the TIF. The only thing that’s growing is her taxpayer-funded pension* that she’ll enjoy while the rest of the county figures out how to live on a fixed income.
* When I was a county commissioner I voted to cease giving elected officials pensions as well as cut the taxpayer-funded expense accounts from $2,500 per commissioner to $250. Ask the county executive today how much she has awarded herself in the way of an expense account, including the taxpayer-funded vehicle used daily.