Where Do We Draw the Line With These Huge Bond Issues?
We are in the midst of a major dispute in Moore County regarding the Board of Commissioners' approval by a 3-2 vote of a $50 million bond for a new jail center and some utility improvements.
This measure would substantially increase our debt in the midst of a recession and also deny our citizens the right to vote on the issue.
As a result, the Right2Vote citizens group held a town hall meeting Tuesday in the Pinehurst Village Hall on this project. As reported by Florence Gilkeson in The Pilot, there was strong opposition to the cost, location, size, danger to schoolchildren and method of financing for this proposed center.
Participants in the meeting were unanimous in objecting to the proposed location, which would bring prisoners in close proximity to schoolchildren at their bus stop and in the adjacent ballpark and library.
Curiously, this proposal was not supported by two special committees appointed by the commissioners to study the issue. In particular, the building needs study group found that only >about 200 more beds were needed by 2030 instead of the 400 to 600 in the mammoth building proposed by the commissioners.
Also, a judicial committee headed by Judge Webb of the Superior Court recommended that the project be deferred until it could be co-located outside town and physically attached, for safety reasons, to a new courthouse facility.
In their project proposal, three commissioners, Picerno, Melton and Caddell, are rejecting both committees. They are insisting on a method of financing that would let them proceed without voter approval on a bond five times larger than any ever authorized without being placed on the ballot.
In addition to these concerns, our group has completed a financial analysis that shows Moore County is almost uniquely vulnerable to the ongoing recession. As such, it can ill afford the added risk of a new bond or the added cost of limited obligation rather than general obligation financing.
Two years ago, voters approved a $54 million bond for the schools and a $14.5 million bond for the community college. We have just started debt service for these bonds, and very little of this debt has been retired.
There is room, however, under our own borrowing guideline (2 percent of total property -valuation) to issue a bond for a smaller detention center and -contiguous courthouse facility outside town. This would be much cheaper and safer for the kids and could be financed with a less expensive general obligation bond, which would be put to the voters.
Most readers will have heard the Board of Commissioners boast of its success during the last decade in standing firm against property tax rate increases. They note we have lower rates than all nearby counties. This is largely true but masks the reality, which they don't want to discuss.
What matters is how much each property owner has to pay. At this time, Moore County has a total property valuation per capita which is twice as high as all surrounding counties. Even at a low tax rate, this results in a tax levy per capita which is the highest in the area.
At the same time, property values have been tumbling, and according to the Federal National Mortgage Association are down about 18 to 25 percent peak to trough during this recession. Trouble is we haven't found the trough yet and prices are still declining. In Asheville, which is similar to our market, prices have already dropped another 6.1 percent this year. Moore County is uniquely vulnerable to this drop, which has not yet been reflected in the octennial tax reappraisal. This reappraisal has been delayed by our board in the faint hope the economy would restore the lost property value. As a result of this delay, property owners are paying property taxes and insurance premiums that are typically several hundred dollars higher than they should be. The insurance money is in essence being poured down the drain rather than used to support our small businesses. So the reappraisal must be done soon as a matter of fairness. This drop in revenues will make it difficult to service our existing debt and require a major tax increase, further exacerbated by the proposed bond. The resulting tax increase will be very hard for our rural residents and senior retirees. At a minimum they should be allowed to vote whether to support this issue given the economic recession and our vulnerability.
The largest bond ever approved in Moore County >without the -voters was a $9.9 million education bond. Traditionally, limited obligation bonds have been used only for smaller amounts to bridge the gap between elections. If we start allowing huge bonds without voting, where will we draw the line and let citizens vote - at $75 million, or $100 -million or $500 million?
Does this sound like Washington? It's time for -taxpayers to demand that action on this bond be deferred pending further consideration by residents and their commissioners.
Taxation without representation was rejected more than 200 years ago. It's time to focus on a smaller detention center and contiguous courthouse facility located outside town, and to give citizens back their vote.
John Marcum lives in Pinehurst.
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