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Just Say “No” to the SRJC Bond Proposal

Columnist: Bob Andrews
October, 2014 Issue
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Bob Andrews
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Wouldn’t it be helpful to let voters see some real numbers?

 
 
 
Recently, I noted that pretty much every bond measure, sales tax increase, utility tax, parcel tax and special tax gets approved by Sonoma County voters. Giddy with the prospects for more taxpayer money to spend, cities in the county (and the county itself) are throwing caution to the wind and putting up no fewer than seven bond and tax measures for the November ballot, with one additional measure carried over by Sonoma County to a special election (cost: up to $600,000) in March 2015. Why the delay? Well, of course, because the county doesn’t want voter tax-fatigue in November to jeopardize the chances of its big sales tax increase being approved.
 
Including the tax and bond measures on the April and June 2014 ballots, Sonoma County voters will have been hammered with 16 separate potential hits to the pocketbook in less than 12 months. I get the idea that government officials want to pry loose the maximum amount of taxpayer money before the economy takes a downturn.
 
There isn’t anything bigger on the November ballot than Santa Rosa Junior College’s bold request for voter approval of $410 million of new debt, to be repaid by property owners over 30 years. There are already eight special taxes adding $460 to my property tax bill, including four Santa Rosa school bonds, Warm Springs Dam bonds, two “direct charges” (“mosquito” and “storm water”) and—lo and behold!—an existing $251.7 million Santa Rosa Junior College bond measure from March 2002.
 
Check out Dan Drummond’s article about the SRJC bond measures in the July newsletter of the Sonoma County Taxpayers Association. He points out three key misdirections in the “Argument in Favor” of the 2002 debt proposal: First, the $251.7 million will “meet the needs of this district for the 21st century;” second, passage of the measure “will also let the college receive millions in state matching funds;” and, third, the borrowed millions would be sufficient to complete the building upgrades for which the JC is now seeking millions more. Do people who voted for the bond realize that, with respect to meeting “the needs of this district for the 21st century,” the “21st century” only lasted 12 years? And do people realize that there was no program for state matching funds in effect when campaigners were touting them? Instead, state money was dependent on passage of an entirely separate bond measure five months later. Were these misstatements deliberate or just a combination of poetic license and wishful thinking?
 
In 2002, the actual ballot language followed a common pattern for such measures that can be summarized as follows: Always promise the moon (see SMART ballot measures as a perfect example); always mention either public safety, schools or congestion on Highway 101; always put the tax increase or dollar amount of new borrowing at the end of the description; always say “bonds” instead of “debt;” and never quantify the total cost of borrowing or total amount of taxes to be raised. Do voters see the manipulation inherent in such ballot descriptions?
 
Now fast-forward to the ballot description for $410 million of new debt. “To upgrade facilities, prepare students for careers/university transfer, attract quality faculty, keep SRJC current, upgrade classrooms, labs and technology for 21st century science/math skills, modernize career education facilities for…public safety…shall (the) District issue $410 million in bonds….” Big promises? Check. Mention the 21st century again? Check. Mention public safety? Check. Put the dollar amount of $410 million at the end? Check. Describe the borrowing as “bonds” rather than “debt?” Check. Don’t quantify the cost of borrowing this enormous amount of money? Check. It all sounds—deliberately—so painless.
 
Wouldn’t it be helpful to let voters see some real numbers? The debt authorized in 2002 was $251.7 million. Here we are, 12 years later, and the principal amount still owed is $174.72 million. To service this debt, the amount of principal and interest demanded of taxpayers each year will soar from about $13 million this year to more than $20 million per year. The total amount of taxes needed to pay off $251 million of debt will be more than $415 million. Using a similar ratio, it might very well cost $675 million of taxpayer money to pay off $410 million of new debt. In this regard, the Sonoma County tax collector has the power to set a variable tax rate calculated to obtain the required amount each year. For a home with an assessed value of $400,000, the annual cost for existing SRJC bonds has been $75 to $95. The new bond could easily add another $125 to the tax bill for the next 30 years, multiplied by tens of thousands of property owners. Should we just accept the word of JC officials that this huge and long-lasting financial obligation is necessary?
 
Bottom line: Borrowed money isn’t free money. I’ve come up with a new phrase in Latin to describe our situation in Sonoma County: alienus perniciosus, which roughly translates to “ruinous debt.” Let’s just say “no” to the SRJC bond measure.


 

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