Don't raise net taxes; find savings elsewhere
by Linn and Ari Armstrong
The following article was originally published by Grand Junction Free Press on March 19, 2007.
On April 3, Grand Junction voters will decide whether to raise net taxes or encourage the city to find ways to cut wasteful and unnecessary spending. The second option will best protect the right to control one's income and do the most good for the local economy.
Question A claims to pay off the bonds for the Riverside Parkway "without any increase in taxes." Such language is misleading. While the tax rate will not increase, the net amount of money that people pay in taxes will increase, if the measure passes.
You can't get something for nothing. Question A would eliminate the refunds authorized under the Taxpayer's Bill of Rights, or TABOR, until the bonds are paid. This is clearly an "increase in taxes" by the common-sense understanding that people will pay more money to the city and keep less money for themselves.
We're not convinced that it was ever a good idea to fund the parkway with debt. (Nor are we convinced that roads must be the project of government, but that issue would take us too far afield.) But the question facing voters is limited to whether the bonds should be paid off with existing revenues or with the TABOR refunds as well.
The 2007 Voter Guide published by the Grand Junction Area Chamber of Commerce includes comments by Councilor Bruce Hill. He laments, "While our [the city's] coffers swelled by some 12 million dollars... we are allowed to keep only 4 million of the 12 million collected. Our choice as a community is to either refund the money... or to collectively pool our small rebates and do something truly beneficial for our community."
What arrogance! Hill assumes that when people spend their own money, that's not "truly beneficial for our community," but when he spends other people's money, that is "truly beneficial."
The "community" does not consist merely of the city government and its projects. The community is primarily the local network of free enterprises, private businesses, families, and voluntary associations. Eliminating the TABOR refunds will divert money away from this community to city officials.
Hill argues that Question A would "save all our taxpayers in excess of 5 million dollars in interest payments." But Hill ignores the costs. If the TABOR refunds are sucked out of the free economy, that means that people will have less money to spend on their own needs, including their own debts and investments. There's no reason to think that the "present value" of the money would be higher with the city than if left with the people who earn it.
But let us grant that, generally, it is better to pay off debt faster. Does this require an increase in net taxes? No. The other possibility is to cut government waste and unnecessary spending. We think Grand Junction should pay off the Riverside bonds on the accelerated schedule, and do it not by raising net taxes but by spending its existing resources more prudently.
A comprehensive survey of city spending is beyond our means, though we're confident that such a survey would reveal countless ways for the city to cut costs and save money. Here we'll mention only a few items from the city's 2006-2007 "Budget In Brief."
The Two Rivers Convention Center will earn over $2 million in 2007, according to the city's estimates. Yet the "general government subsidy" will be over $750,000. The city's pools are expected to earn over $700,000 in revenues in 2007, yet the subsidy will be over $250,000. Finally, while the city's two golf courses "are fully self-sufficient and obtain no general government subsidy," they compete with private golf courses.
These city-run businesses already cover most of their costs, and a private owner would find ways to increase revenues and cut costs in order to show a profit. A tax subsidy for using the Convention Center or going swimming is unnecessary. It is also unjust. Those who do not use the Convention Center or the pools should not be forced to subsidize those who do. It is simply unfair that the city taxes some business and recreational activities to subsidize others.
The proper purpose of government is to protect individual rights, not run meeting halls, swimming pools, gold courses, and other enterprises that compete with private ventures. The city should sell off these assets where legally permissible and eliminate the subsidies to pay off existing debts as fast as possible. We're sure that many other cost-saving steps are also possible.
Ask yourself two questions. First, is the city of Grand Junction currently spending its resources as efficiently as possible? Second, are people able to spend their own money in "truly beneficial" ways? We answer no and yes, respectively, which is why we think Question A is a bad idea.