Cabarrus Cheap Seats

UPDATE (June 21, 2007): THIS ARTICLE WAS USED AS SOURCE MATERIAL FOR A KANNAPOLIS CITIZEN OP-ED - CLICK HERE TO READ MORE. 

I was going to put a video from Saddam’s Information Minister (AKA “Baghdad Bob”); but he seemed credible in comparison to what I’m talking about today.  So, no video for today’s Friday Five.

This week the Kannapolis Citizen published an editorial from Commissioner Coy Privette regarding his vote against the North Carolina Research Campus (NCRC) Tax-Increment Financing (TIF) bonds.  [Click Here To Coy's Op-Ed in the Kannapolis Citizen]

The following are Five Lies That Coy Privette Told About the NCRC TIF:

5. The TIF is a subsidy: 

Every penny the government spends to subsidize Murdock’s development is a penny that can’t be spent on essential government obligations like schools. 

TIF is not a subsidy.  As I discussed before, the County isn’t giving Murdock or Castle & Cooke any money - just building infrastructure.  Castle & Cooke isn’t even getting a tax-incentive unlike the ones given to many local businesses.

4. TIFs are “junk bonds”:

The interest rates are higher because of the high risks, compared to other public financing methods. That is why they are referred to as “junk bonds.”

Funny he uses the term “referred to”.  In this entire debate, he has not offered up one credible reference that would call TIF bonds ”junk bonds”.  It because it isn’t true: In 2006, 92% of all rated TIF bonds were rated BBB or higher. 

3. The interest rate for TIF is as high as the difference between using a payday lender vs. a mortgage

Now I ask you, if you were going to buy a new car, would you finance it through a bank or a payday lender? Well, of course you’d finance it through a bank. You’d pay thousands more in interest charges using a payday lender. It’s an easy decision — no one in his right mind would throw away all that hard-earned money.

Well, guess what? The Board of Commissioners voted to finance its corporate giveaway through the equivalent of a payday lender for governments.

According to the Center For Responsible Lending, the rates for payday loans are about 36% as opposed to around 6 or 7% for a mortgage - an entire order of magnitude different.  The difference between TIF and COPS was along the order of single percentage points with much more favorable payment terms for TIF. [If you care, you can read more here]

2. Since Coy Privette defined TIF as the most expensive way to dole out corporate welfare and that he was opposed to corporate welfare in all of its forms - one could infer that Coy Privette was opposed to TIF as a concept on principle.

As a conservative, I’ve always thought it was bad public policy to forcibly take people’s money, in the form of taxes, and give it to private companies. When government does that, it takes money away from those who can least afford it and gives it to those who need it the least. It’s known as corporate welfare…

TIF bonds are the most expensive method of public financing available…

Here’s the tune he was singing last year about TIF as a concept when he was looking for votes in the Republican Primary:

My response to the North Carolina Research Center is exciting. Kannapolis can become comparable to the Triangle Research Park, and we know what that has meant to the Raleigh-Durham-Chapel Hill area. Former Governor and Industrialist Luther Hodges had that vision. Now, Billionaire David Murdock has a similar vision for our area.North Carolina voters approved Increment Bond Financing in the 2004 election. These bonds will make it possible for the infrastructure to be provided. It appears that this project will be the first time that this voter approved financing will be used in North Carolina. I was delighted to be a part of the committee to promote the passage of these bonds, and it was a distinct honor to make the motion that Cabarrus County endorsed the passage of this form of financing. Kannapolis has become the topic of conversation throughout the state as we will be launching a way to replace our dependency upon textiles, furniture, and tobacco as the foundation of our economic structure.

It is projected that the NC Research Center will provide some 5,000 jobs with a potential of reaching 30,000 in related enterprises. With this kind of economic development, we will rise to the challenge of providing the educational facilities, public safety, health, and other environmental concerns.

With the quality of growth that the Center will provide, it will make it possible to keep a low property tax rate that has a definite impact on our senior citizens and working families.

Yours for a brighter future,

Coy C. Privette
County Commissioner

[Read More About That Here]

Even though it was decitful pandering - it seemed reasonable.  Why would Coy back away from it now while this project is so popular?  Well, the NCRC is a very public project and it makes an excellent scapegoat for some public policy stupidity in the past.  That brings us to…

1. Your taxes will go up because of the County’s involvement in the NCRC TIF

To meet its essential obligations, the county will have to make up for each of those pennies spent on Murdock’s project by either raising your taxes or cutting services.

The only truth here: County taxes are going up.  They were going up before the NCRC.  It’s what I called the Cabarrus Youth Tax.  Basically, Coy and his friends put off decisions and used financing trickery to spend more money than they brought in - deferring the payments to a later date: that later date is now.

Coy will use the NCRC as the reason the taxes are going up to attack Republican Cabarrus County Commissioners Joni Juba and Bob Carruth in the next election to install a Cabarrus Taxpayers’ Association (CTA) marionette to the board.  He’ll use it in 2012 to defend himself.  The NCRC is big…it’s big enough for a half-decade leadership deficit on the Board of Commissioners to get forgotten by the voters if Coy and the paleoconservatives at the CTA have their way.

It needs to be clearer that the Cabarrus Youth Tax was the sole responsibility of Mr. Privette and his ilk.  So, I’m going through the process of renaming the Cabarrus Youth Tax the Cabarrus cOunty Youth Tax or the COY Tax.  What do you all think?

Let me know your thoughts on that or you can join some other conversations with other Cheap Seats Readers going on right now.

• Discuss the difference between the government opening up markets and people making themselves marketable.
• Find out about my family’s big news.
• Do talented Mexicans exist?  You decide.

See y’all Monday.