Magic Money

January 28, 2009 at 2:45pm By: Mr. Wilson Posted in The Lincolnite Blog

I am fuzzy on Senator Amanda McGill’s LB85. The bill is supported by Mayor Beutler. I hope some of you can help explain it to me.

The bill would allow municipalities to created “growth districts” in areas of the municipality created since 1988. Then bonds would be issued for infrastructure improvements, proportionate to the ratio of the growth district’s size relative to the area of the municipality.

Here’s the first thing I don’t understand. Other than defining the maximum amount of bonds that can be issued, the growth district itself is meaningless. The infrastructure improvements don’t have to occur within the district. Thus, its boundaries are unimportant. All it really means is that municipalities that have seen a lot of growth since 1988 can issue larger bonds than those that have seen less growth. The bill is inherently pro-sprawl; municipalities are effectively punished for infill and rewarded for taking up as much space as possible, regardless of how many people live in that space.

Another thing I don’t understand comes from Lincoln’s own Sen. Bill Avery, who said “It will not cost the state anything. And my belief is it will not raise taxes.” It is his “belief” it won’t raise taxes? That’s comforting. The money to pay for these improvements has to come from somewhere. If it isn’t coming from the state, it’s coming from the municipality. And if it is new spending by the municipality, the funds to pay for it won’t just appear out of thin air. There is no such thing as magic money that manifests itself out of the ether. (Well, not at the state and local level. The Feds have pulled trillions of dollars out of ... well, out of some place.) Anyway, the point is this money has to come either from spending cuts or new taxes sources. Spending cuts are unlikely because, at least in Lincoln’s case, no amount of budget cutting is going to get us enough money to fully fund our infrastructure needs. That leaves taxes. We can always hope that tax receipts increase on their own. That would be nice.

Notably, this financing mechanism would not require a vote of the people. Senator Dennis Utter’s AM57 would change that.

All that being said, I’m the first to admit that I am extremely ignorant when it comes to financing matters. I try to educate myself, but it’s an ongoing process. Can anybody explain this to all of us—factually!—in a way that helps us decide just how great or terrible this idea is?

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Dave K January 28, 2009 at 10:04pm

I’m fuzzy on how Amanda McGill got elected.

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