Local government spending in Raleigh and Wake County is mushrooming.
The City Council wants to spend more.
The County Commissioners want to spend more.
The School Board wants to spend more.
The County Commissioners’ Blue Ribbon Task Force wants to spend more.
And they all want to borrow and raise taxes to pay for it.
What’s going on here?
Mayor Charlie Meeker has brought a whole new philosophy – when it comes to taxing and spending – to local government. And, at last, it’s taken root, reached critical mass and erupted. And it’s not going to be easy to put the spending genie back in the bottle.
The Mayor spent $215 million on a convention center and $20 million on a downtown hotel, then there wasn’t enough money for roads so the City had to borrow and raise taxes. Then the Mayor spent so much in the latest budget he had to raise taxes again.
Let’s look at the latest proposal rattling around City Hall. The proposal to grant North Hills builder John Kane $75 million (and an exemption from property taxes) so he can build a parking deck and develop the land around the old Bennigan’s restaurant across Six Forks Road from North Hills.
Usually, when a developer builds a mall he borrows the money, repays his debt, and pays his property taxes to the city.
Under Mr. Kane’s proposal, in effect the City loans him $75 million to build a parking deck, then he repays the debt with money he would have paid in property taxes.
You can’t blame John Kane for thinking that would be a good deal.
Look at it from his perspective.
He sees Mayor Meeker spending money left and right, for instance, pouring millions into a convention center that will probably lose money – and require tax subsidies – for years. While Mr. Kane is talking about building a mall that will actually make a profit.
He sees Mayor Meeker spending $40 million for an underground parking garage downtown and subsidizing restaurants and supermarkets – so, he thinks, why shouldn’t the Mayor support improving North Hills a little, too?
Then a surprising thing happens.
The Mayor turns his thumbs down on Mr. Kane’s proposal.
Even stranger, the one kind word for poor Mr. Kane’s $75 million loan from the City comes from a Republican – Councilman Tommy Craven.
So, suddenly, we have an odd picture. The Mayor, who’s spent millions on about everything in sight, is against spending another $75 million at North Hills – and a Republican is for it.
What’s happening here? Well, the Mayor’s not against spending money. He just doesn’t want to spend it at North Hills. He wants to spend it in ‘underprivileged’ areas – like downtown. How do you explain a Republican wanting to give a $75 million tax subsidy to a private business? Beats me.
The real problem here isn’t whether the City subsidizing North Hills is a good idea. The real problem is the City – under Mayor Meeker – has opened Pandora’s box by spending taxpayers’ money to help people who own hotels, restaurants and supermarkets make a profit. So, naturally, any businessman, when he sees Mayor Meeker subsidizing his competitors, is going to ask himself, Why not me too? Why not North Hills? Or, for that matter, why not Crabtree Valley? Or Triangle Town Center? Or IBM? Or any of another hundred businesses? After all, if the City is going to subsidize their competitors, shouldn’t it subsidize them too?
In one sense, cutting taxes on anyone in Raleigh these days is so unique Mr. Kane’s proposal has a wayward appeal. But the whole idea of saying to one group of people, You don’t have to pay taxes, when everyone else does is troubling.
The real question is should the City be spending money like water to subsidize everyone in sight?
Councilman Craven aside, the Republicans need to answer that with a big, “No.” They need to stop voting to subsidize hotels and start offering a counter-voice to Mayor Meeker on spending and taxes. And that voice doesn’t need to just be heard in the hallways of Town Hall and in the City Council Chambers. It needs to be heard by the 25,000 taxpayers who vote in City elections. And among anyone else who will listen.
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