WHERE WILL ALL THE MONEY REALLY COME FROM?
[from March 2006 issue]

PRIOR EDITORIALS ARCHIVED HERE


Unless Wall Street sees through the house of cards that the cobbled-together baseball stadium financing deal really is and ends up not being able to unload the bonds on imprudent investors, it looks like we will have the stadium after all.

We will have to live with the consequences for many years to come because, contrary to what the boosters in the District Building have promised, we already overtaxed residents will be paying for this sweetheart deal that is about to further enrich the already obscenely rich fat-cat, out-of-state baseball owners more than they could have hoped for when they first found their patsy politicians ripe for the plucking.

Let’s consider just a few of the fine points relating to the promise that you and me and all our neighbors won’t be paying for the stadium -- we “little people” -- who are wondering how we will even be able to find the money to pay higher real estate taxes thanks to an assessment system that guarantees gouging.

Consider the gross receipts tax that will be imposed on the utility companies -- telecom, gas, electric, heating oil. What most our politicians are scared to tell you is that those utilities won’t be one dime out-of-pocket for the very simple reason that under all their approved rate tariffs those taxes get passed directly through to the customers. Just take a look at your utility bills; it’s not uncommon to see so many state and federal taxes and fees added on that one wonders where will it all end? Well, as the city council has once again demonstrated, there is no end.

And, it’s not just the gross receipts tax to be assessed that is out there. Keep in mind that all businesses, other than “small” businesses are being assessed a special stadium “fee.” Does anyone living in the real world really expect Safeway and Giant and all the large retailers and the big bars and entertainment operators and the myriad other business of all kinds subject to the fee assessment will simply eat it? Don’t be silly; they will pass that set of costs on to their customers -- they would be nuts if they don’t start jacking up their prices.

But we need also to be concerned about other sources that are likely to be tapped to meet cost overruns which, we have been told, the legislation forbids. Yet there is provision to tap “excess” funds generated by stadium receipts, up to $20 million for that purpose. But isn’t it conceivable that those funds, if tapped, will have to be made up in some fashion from other revenue sources in order that the city will be able to meet other obligations for which it has committed or soon will commit?

Already, we are committed to tapping the first $100,000 million of collected sales taxes each year for the next 10 years to help pay for school modernization. While that $100 million by itself represents only about three percent of our $4 billion or so annual budget, we still worry that this will mean $100 million less to be available for other critical needs. Now, we do agree that the school system’s facilities desperately require major work, and we are not opposed to this expenditure plan in the slightest (assuming the city won’t muck up the whole undertaking as it has been known to do when it comes to managing capital improvement projects).

But there are other looming, major projects being readied to tap our cash, such as the questionable deal with Howard University to build a private hospital on city land for which we will pay and yet it will not be designed to serve the low-income population as did DC General -- so what’s the point and why are we going to be socked for that and what dollar amount will be siphoned off annually from sales tax receipts to pay for that? Or, how will the projected Anacostia waterfront boondoggle be paid for? From another raid on the sales tax stream? Not likely, since by the time we get to that point the sales tax stream will have run dry so then they will look to the other cash cow -- real estate!

But with all this tapping of phantom “new” money, where do we get the real money to pay for essential, competently dispensed city services? We have a child welfare system that is in collapse; we have dangerous elevators that apparently are hazardous to life and limb because we only have two (!) elevator inspectors, we have a paucity of competent grants managers throughout the agencies so that routinely, year-after-year, the city is forced to give back to the federal treasury vast millions of dollars of otherwise allocated federal grant funds because there were too few people around to process the necessary paperwork; it takes months and months to accomplish these routine, but essential tasks. And as those months drag on, the next thing we know is -- oops -- we slid into the next fiscal year and we can’t have the promised funds after all, funds that had been included in the city’s operating budget for that year.

No, we are not sanguine when trying to comprehend where the money will be coming from to undertake these bread and circus boondoggles.