Fiscal responsibility needed
Steve Arrison recently criticized a letter writer who, like myself, is going to vote no on Sept. 10 to the issuing of $8.5 million in additional bonds by the city to finance baseball fields at the site of the now-defunct Hot Springs Boys & Girls Club, which the city put zero effort into saving. Perhaps that's because the club board had already agreed to give them the land, so they had a vested interest in the failure.
What is a city-issued municipal bond? According to Zach's Finance, "Many city governments find themselves up against a wall. ... " and therefore use bonds for "day to day operating expenses, building new structures, improving existing structures, or making repairs." They can also be used for "employee wages, maintenance and insurance, building schools, improving roadways, and ensuring the safety of bridges. ... "
Taxpayers can be the judge of whether $8.5 million for five baseball fields falls into those categories. Now, as to how a bond works, Zachs Finance says, "Municipal bonds are debt securities. Investors earn money on city bonds when the city pays interest on the investment at certain intervals." In layman's terms, it is a loan, and we the taxpayers will be paying the interest, whether we use the fields or not.
Arrison said the bonds will not represent new taxation. From a politician or elected official's point of view, that's technically true. In this case, however, the bonds and interest payments are based on a continuation of a 3 percent advertising and promotion tax on restaurants and hotels, a tax some might say actually discourages tourism. It's also a tax city residents get hit with every time they eat out. That 3 percent tax could technically be repealed by a citywide vote, but slick city officials put a provision in years ago that prevents a vote from ever taking place as long as the tax itself is indebted by bonds such as these.
I personally wish someone on the city board had the courage to put a provision in limiting the amount of indebtedness the city could incur at any one time. But that would take some fiscal responsibility, something city government hasn't shown in a long time.
In a nutshell, when you vote (and please do) on Sept. 10, remember that extra 3 percent on every dollar, every time you eat out or get any sort of prepared food (no, even Dodge Store crispitos aren't exempt). If you want to continue paying it, and think $8.5 million for five baseball fields sounds like a good deal, by all means, vote yes. If, like myself, you think we're taxed enough already, our city government showed no interest in saving the Boys Club, and you don't see $8.5 million in value for five baseball fields, vote no.
Hot SpringsEditorial on 07/11/2019
Print Headline: Thursday's Letter to the Editor