City Debt – Up, Up, Up!
According to the News and Observer (7/24/06), since Mayor Meeker took office Raleigh’s debt has tripled. In a few weeks, on September 30, for the first time the City’s debt will pass $1 billion. Five years ago it was $294 million.
That puts the spending spree the Mayor has been on in perspective.
Granted, some of the new debt is necessary, like for a new water treatment plant. But a lot of it wasn’t and adding $700 million in new debt in five years is troubling. City Manager Russell Allen says there is no need to worry. He says Raleigh has just moved from the low debt to the moderate debt category. But after Allen said the new debt was fine, he turned around and said he opposed developer John Kane’s request for $75 million in public financing for a parking deck at North Hills. Why? Because, he said, he is worried taking on new debt for projects like Kane’s may jeopardize Raleigh’s bond rating.
The problem, when the Mayor borrows $243,000,000 to build a Convention Center, is part of the debt has to be repaid each year and those debt repayments add a new expense to the city budget. Spending goes up.
And it doesn’t stop there. Owning a Convention Center costs money. The city has to pay for new employees, for maintenance, for electricity, for dozens of other expenses and most – almost all – Convention Centers lose money. That loss becomes a new expense for the City. Spending goes up, again. And while the Mayor’s adding all these new expenses the cost of the other necessary services the city provides – like water, policemen, and firemen – keep going up, too.
So, borrowing can end up being pretty painful for taxpayers. Mayor Meeker’s been on a red hot spending spree for five years; he’s spent all the city budget of $500 million each year and added $700 million in debt. That’s one reason this year Raleigh raised property taxes 9%.
Next month the City is going to borrow another $265 million and that debt will have to be repaid too. Will it mean taxes and fees will go up, again, next year? Maybe next election the Republicans will do what they didn’t do last year – make Mayor Meeker’s philosophy of Borrow, Spend and Tax an issue in the Mayor’s race.
City Debt – Up, Up, Up!
According to the News and Observer (7/24/06), since Mayor Meeker took office Raleigh’s debt has tripled. In a few weeks, on September 30, for the first time the City’s debt will pass $1 billion. Five years ago it was $294 million.
That puts the spending spree the Mayor has been on in perspective.
Granted, some of the new debt is necessary, like for a new water treatment plant. But a lot of it wasn’t and adding $700 million in new debt in five years is troubling. City Manager Russell Allen says there is no need to worry. He says Raleigh has just moved from the low debt to the moderate debt category. But after Allen said the new debt was fine, he turned around and said he opposed developer John Kane’s request for $75 million in public financing for a parking deck at North Hills. Why? Because, he said, he is worried taking on new debt for projects like Kane’s may jeopardize Raleigh’s bond rating.
The problem, when the Mayor borrows $243,000,000 to build a Convention Center, is part of the debt has to be repaid each year and those debt repayments add a new expense to the city budget. Spending goes up.
And it doesn’t stop there. Owning a Convention Center costs money. The city has to pay for new employees, for maintenance, for electricity, for dozens of other expenses and most – almost all – Convention Centers lose money. That loss becomes a new expense for the City. Spending goes up, again. And while the Mayor’s adding all these new expenses the cost of the other necessary services the city provides – like water, policemen, and firemen – keep going up, too.
So, borrowing can end up being pretty painful for taxpayers. Mayor Meeker’s been on a red hot spending spree for five years; he’s spent all the city budget of $500 million each year and added $700 million in debt. That’s one reason this year Raleigh raised property taxes 9%.
Next month the City is going to borrow another $265 million and that debt will have to be repaid too. Will it mean taxes and fees will go up, again, next year? Maybe next election the Republicans will do what they didn’t do last year – make Mayor Meeker’s philosophy of Borrow, Spend and Tax an issue in the Mayor’s race.