Proposition 11, what do you think?

[Midtowner]

(ECONOMIC DEVELOPMENT)
Description
A diversified employment base that provides quality job opportunities is important to our growth. This proposition creates economic incentives for companies that relocate or expand in Oklahoma City. Oversight for this incentive program will be provided by a City trust made up of citizens and elected officials similar to the MAPS for Kids program.

Legal Description
Shall the City of Oklahoma City, State of Oklahoma, incur an indebtedness by issuing its bonds in the sum of Seventy Five Million Dollars ($75,000,000) for the purpose of economic and community development in Oklahoma City, with or without the use of other funds, and levy and collect a special tax, payable annually in addition to all other taxes, upon all the taxable property in said City sufficient to pay the interest on said bonds as it falls due, and also to constitute a sinking fund for the payment of the principal thereof when due, said bonds to bear interest at not to exceed the rate of ten percentum (10%) per annum, payable semiannually and to become due within thirty (30) years from their date: Provided however, that in no event shall the real and personal taxable property in said City be subject to a special tax in excess of five mills on the dollar for all bonds issued pursuant to Section 35, Article X of the Oklahoma Constitution?

[Midtowner]

I'll reply to myself to get the ball rolling.

Out of all of the propositions, I disagree with 1, 10 and 11. I don't like 1 because it encourages suburban sprawl. I don't like 10 because it's a mass transportation package which fails to account for light rail. As for 11....

I could say that quite simply, this is corporate welfare, thus bad, but that would be overly simplistic.

On its face, I think the aim of this legislation is great -- and yes, incentives do work and are profitable for cities. I just think the method here is stupid (to put it lightly).

The city seeks to create a public trust -- an entity which oversees the borrowing and spending of money for a public purpose. Some of the members of this trust will be elected (e.g., a city councilman may be a de facto member of the trust board) some will be appointed, etc. The trust will then issue bonds -- I guarantee you the interest rate on said bonds will be right at the max -- 10%.

Let's just stop right there -- instead of saving the money and spending it as it comes in, the city will borrow it. It will then pay it back using the public's money. The cost of this 75 million over the 30 years the city has to pay back the bonds? Up to 225 million dollars. That's a horrible deal for the taxpayers just from a dollars and cents standpoint, IMHO. It would be far smarter to simply raise taxes a very small amount, pump the 75 million into the trust, then go from there. I'm not an expert on fiscal public policy, so someone tell me why I'm wrong in thinking that this is just piss poor financial management.

Secondly, I question the integrity of a scheme such as this. Essentially, certain people will be appointed to the trust (business leaders, i.e., good 'ol boys) with the vague mission of "economic development." In other words, these business leaders will undoubtedly use this public money to line their own pockets and their friends pockets. The organization of this trust will be similar to that of OCURA. I sincerely hope the people of Oklahoma City have learned from their mistakes. I highly doubt this fund would be used to do anything more than use public money to pay local companies to do what they were going to do anyhow with their own money.

For those reasons, I think Proposition 11 is a lousy idea.

[metro]

Excellent points Mid. Since you're more well versed in legal and contract issues than I, you should go to these public bond meetings the city is conducting and raise these concerns. I'd be there to support you.

[Midtowner]

Excellent points Mid. Since you're more well versed in legal and contract issues than I, you should go to these public bond meetings the city is conducting and raise these concerns. I'd be there to support you.

I'd be there, but we're in the middle of finals. They do this on purpose so that law students can't attend