Explanation of “Renaissance Debt”–A Pig in a Poke
May 23, 2011 Leave a comment
For the record this is the best description of what is happening. Forget tax reductions for the near term. Forget pension reform, if we can afford to add to our debt. This is what we call in the Midwest a “pig in a poke.”
This proposal adds $21 million to the long term debt of the city and extends the volume and payment period of that debt far into the future making it impossible to maintain, much less reduce the current excessive property tax rates. If the current course of retiring the bonds were followed, in 2017 we would have 39 percent less debt service on these bonds, in 2021 we would have 54 percent less, and they would be totally retired in 2033. Under the managers proposal the entire debt service would continue at its present rate until 2033. This proposal would not allow any room for reduction of our property taxes in the future. More ominously, it would not allow for the distinct possibility that the City will become responsible for a massive restoration project at the Biltmore hotel because of deferred maintenance by the present management company. This will have to be funded by new borrowing.