Tuesday, October 28, 2014

Why Bonds Suck: Because you have to pay for them stupid. By Geniusofdespair



Bonds suck and finally you can see the numbers, remember something called 'interest'. Doug Hanks wrote about them yesterday, they are called the debt tax (see bonds are a tax):
"Miami-Dade’s debt tax will soar in the coming years, even if voters reject a $390 million borrowing plan for a new courthouse, according to county forecasts.

Without a dollar of new debt for the judiciary, county forecasts show the special property tax that pays for the county’s debt is set to jump by about 50 percent in 2016. That’s thanks to the arrival of new debt that voters already approved for the county-owned Jackson hospital system, as well as rapidly increasing borrowing costs tied to a nearly $3 billion bond program that voters approved in 2004."

The bonds are coming home to roost, or more accurately - they are cleaning out your pocketbook. Don't believe the hype on them not costing anything.

"Currently costing $45 for every $100,000 of a property’s value, the debt tax funds borrowing approved by Miami-Dade voters and generates the revenue behind a wide portfolio of construction projects.
This year it is backing about $1.4 billion in borrowed funds used to create the new Pérez Art Museum Miami, expand county park facilities, build the Miami-Dade police headquarters, dig a tunnel to PortMiami and back hundreds of other projects. It also would allow Miami-Dade to borrow $75 million for an economic-development grant program that Mayor Carlos Gimenez wants to use to provide $9 million for the SkyRise Miami project."

24 comments:

Anonymous said...

We are obviously living beyond our means in Miami Dade and spending our money on luxuries and frivolities instead of necessities. This Skyrise project that wants millions in taxpayer money is the latest bs proposal supported by lobbyists and Mayor Gimenez along with the miami wilds theme park. And let's not forget Gimenez' all out Beckham stadium campaign. Meanwhile, our city won't survive a superstorm Sandy (which is inevitable) according to the FEMA director, because we have so badly neglected investing in bAsic infrastructure like our flood control systems and our water and sewer systems.

Anonymous said...

We must pay both principle and interest. Money will not fall out of the sky to pay the loans back. People have to understand that BONDS ARE LOANS. When you vote for a bond, a loan, you also vote to pay for the loan through increases in taxes. It bothers me that FIU is sending literature to voters saying 'There will be NO increase in taxes if you vote for the FIU bond issue'. This is an out and out lie, and everyone has to call them out on this. Our economy is very fragile, people are barely making ends meet. I fear we are headed towards Detroit.

Anonymous said...

2nd anon,
FIU is not asking for bonds. The courthouse is asking for bonds. please be better informed before you post

Anonymous said...

Re FIU who is going to pay off the Fair's lease or to rebuild the infrastructure? Taxpayers. Vote NO on the FIU- another land grab and boondoggle.

Anonymous said...

Where will the Fair go? FIU wanted it moved outside the UDB in the ecologically sensitive water recharge area of the bird drive basin. Not good. Vote No.

Michael Froomkin said...

This is a great time to borrow: interest rates are really low. These projects will likely cost us less than if we wait and do them when either borrowing costs or the opportunity cost of money will be higher. Plus it's good macro to do infrastructure now, when the economy is hurting. So if you accept that the courthouse has a major mold problem and other issues (including size) and isn't going to be easy to fix up (I know some folks dispute this, but mold is hard to get rid of), then the bond makes a lot of sense.

The problem with the FIU proposal isn't that it's a bond (yet) but rather that it's too vague: they haven't told us where the Youth Fair will go or what it will cost to move it. It's really wrong to ask us to approve a plan when we don't even know what it is.

Anonymous said...

You mean to tell me that with all the money that goes through the courthouse no one could think of a better way to pay for a new one other than taxing the already over-burdened little homeowners?

Anonymous said...

Very important that the federal government never allow interest rates to rise. Keep the property bubble alive.

Geniusofdespair said...

Michael we can't do everything by bond something is missing, namely money put aside for infrastructure costs. The county has to use the money for infrastructure first and not on Zany rides, stadiums and spectacles. Enuf. And the Biltmore was a dump, look at it now. We have so much unfunded infrastructure in this county your eyes would roll. What do we do, let everything deteriorate Beyond repair and then have to do a bond because it is so far gone.

Anonymous said...

The Courthouse Bond question is a big fat No. $393 MILLION? The salespeople refuse to show a plan or tell the voters how the money will be spent. Yes, we know lobbyists and consultants will the 30% off the top. Vote No.

Anonymous said...

To Genius of Despair,

If you don't support the Bond issue for the new courthouse, how else are we supposed to fund it? Is there some money left in the general revenue or some other fund that the county can use to fund the very necessary courthouse? Thanks.

Anonymous said...

To Anonymous addressing Genius of Despair above:

Have you ever heard of a special property tax that expires in a set period to fund a specific project?

That's how projects should be funded, not through bond issues.

Geniusofdespair said...

There is $75 million isn't there in the GOB that they were going to waste on dumb projects just last week. Also they have funds they have been using to refurbish the bldg.

Anonymous said...

How about Mayor Gimenez put together a real budget that takes care of basics first, that invests in real economic development projects and infrastructure to support economic development. How about the lobbyist' projects like the Skyrise and Miami Wilds theme park and sports moguls proposals take a hike? How about less hanging with celebrity sports stars like Beckham and paying attention to the people's business? How about not kicking the can down the road on Climate Change adaptations or raiding essential budgets like Water and Sewer? Then maybe there wouldn't be emergency repairs for the Courthouse because these basic things would have been taken care of in due course.

Anonymous said...

So everyone at County Hall knows that this Courthouse proposal is about selling off the historic property to some developer at a bargain basement price with the assurance that taxpayers will pass a bond issue to build a new courthouse(s). Because downtown real estate is hot, hot, hot. Whose the lobbyists behind this deal?

Chauncey said...

I agree with you on very few things. But I love and agree with your stands on bonds and the encroachment on our parks. Perhaps there is some hope for you yet in the Republican Party!

Geniusofdespair said...

Chauncey maybe you are a closet Dem and don't know it

Anonymous said...

why does FIU need to expand on their south campus? why cant they expand at their north campus? havent they been selling some of their land in the north by the bay to developers? it doesnt make sense.

Anonymous said...

The Herald, and others, believe a developer with the $ help of several lobbyists closely tied to Carlos Gimenez covets a massive fee for building the Judges Taj Mahal. FEC Railroad folks? AAF is owned by FEC investors. Jorge Lopez pukes?

Anonymous said...

The courthouse, kicking out theYouthFair, and overlaying libraries into tiny shelters in parks all follow in the footsteps of the city of MIami's Skyrise project vote. It's a prime example of vague wording meant to mislead the public. Who can I sue?

Anonymous said...

Rumors have the reviled Courthouse bond issue failing. Even $1 Million in ads and direct mail can't attract enough idiot voters. Sending shrill judges out 24/7 gives no one any confidence. Anyone ever seen a County project come in on time and on budget? Voters with 100+ IQ all voting Heck No. 169.

Anonymous said...

Jorge Lopez and Judge Butchko doing a double team on ignorant voters. Butchko discloses on 880 am radio cost of the Taj Mahal courthouse will be $616 per sq ft.

Bucky said...

If the corrupt judges don't get their bond approved, watch what happens next. If you thought they were letting courthouse maintenance go by the wayside before, you ain't seen nothing yet. They will stop all painting, cleaning, and repairing until they get their way. They will smile if someone kicks a hole in a wall or uses a sledge hammer to wreck the lobby and then they will take reporters for tours of the damage. They will claim water leaks, heat, or ac problems are damaging important paper records, law books, or computer files.

The corrupt judges (and the rich, corrupt lawyers who curry favor with them) will argue that the courthouse is being condemned and that the county will lose some sort of accreditation if it is not replaced ASAP. The chief administrative judge will shut down the building periodically for a bogus emergency blamed on the age of the building.

The judges and their advocates will claim that guilty parties in court cases can not be brought to justice because of a decrepit courthouse. They will maintain they have to pay out a mountain of money to workers and visitors who are victims (phony ones) of sick building syndrome. The will rope off access to important parts of the building, such as bathrooms, to inconvenience the public, while claiming it is all because of old building problems.

Just wait and see. The "let it rot until they build a new one strategy" will be very apparent to anyone with a brain.

I have seen the strategy attempted before with city halls and schools. With the help of the corrupt and sheepish media, it usually works.

Mark this date down. You heard about their corrupt strategy here first.

Anonymous said...

It is crucial the courthouse bond referundum fail now. There is too much money being made and promised to the usual suspects for this is pass. Later, maybe honest people will be brought on board?