Friday, September 4, 2009
What They've Done and The Unintended Consequences
When the tax payers passed the bond issue to build the Qwest Center about nearly 10 years ago they did it based on a promise made to the voters many times before and kept for many years, a promise that there would be no new property taxes to pay for it.
Perhaps the so-call 'throw back' provision didn't return as much sales tax revenue from the state as originally needed, but that wasn't the reason to break the promise and a 'patch' was eventually agreed to by the state.
So what happened? Clearly, when Mayor Fahey refinanced the Qwest Center debt at a lower rate he could have amortized the debt as intended, but instead he set it up on a 10 year balloon, just paid interest and kept the savings to run the city and avoid increased property taxes to match his spending. He only aggravated that decision by selling out to the fire and police unions and giving them contracts that allowed spiking and retiring after 20 years. Under those retirement contracts many uniformed employees have retired with 100% or more of their salary in many cases and almost as much in many more while the police and union contracts were allowed to go $500 million in debt.
Now Omaha has a mayor whose financial decision making and knowledge wouldn't have allowed him to design outhouses as an engineer had he had a similar engineering ability. And he has a council that has been beaten up and threatened by the thugs from Fire Department Management and the Fire Department Union. So, unable to make tough, rational decisions, Mayor Suttle has made one stupid silly decision after another and then often reversed himself.
And now, at budget time, Suttle has cajoled his city attorney to craft a weak interpretation of the city charter saying that council members must vote for a tax increase to fund the mayor's debt levy increase or violate their oath of office. Where in the political process would you suggest that those who have a vote can be compelled by law to cast a positive vote or be held in violation of their oath of office? Only in Omaha, we guess. But four of six present councilmen at the meeting gave in, gave in to a threat that should never have been made. They gave in without even getting an opinion from someone other than 'the mayor's attorney.' They gave into an increased debt mill levy increase even when their were sufficient funds in the debt fund to cover 2010 obligations. And their actions will probably raise Omaha's property taxes even more by the time Mayor Suttle reviews their other really stupid financial decisions.
So the consequences? Beyond unnecessary property tax increases, the consequences will be visible every time in the future when there is a bond issue to be voted on whether it be for the City of Omaha to build libraries, firehouses, improve streets, etc., or whether it be any other public entity desiring passage of a bond issue. Those consequences will be a total distrust in the 'no tax increase' statement made by those entities of government. Those consequences will show up in advertisements of "Remember The Qwest Center" by any and every opponent to the bond issue. Those consequences will resound with the lack of trust the voter will show when he goes to the polls and casts his 'no' vote for the bond issue.
In other words whatever trust the citizen had in his local government is and will be gone for generations. And politicians wonder about why some think that, "We should throw them all out."