Understand that this Board is on shaky ground. One could legitimately argue that the next few years and their forthcoming tax increases will define the next generation of our residents. Under the school board’s current path the high school construction project will raise taxes between 15-20% alone. When looking out a bit further we can see more tax increases for PSERS, staff salaries, health benefits, and more. This will be coupled with possible lower revenues from earned income taxes and investments income. An unconstitutional real estate tax system here in Allegheny County only adds to the uncertainty of future taxes in Mt Lebanon. Add to all this an article by the City Manager down in Johnstown, PA where he points out that more than 50% of the municipalities in the 10 county Pittsburgh region have experienced structural deficits between the years of 2000 and 2005 and you can see that the financial footing out there is rather treacherous.
I have posted before regarding some of the effects of higher taxes here and here. I have posted on the options that potential residents have (here and here) when comparing tax rates of similar communities. The fact is that people have choices. I WANT people to choose to live here. We have a lot to like. Mike Madison over at BlogLebo has posts about what he loves about Mt Lebanon. I'd encourage people to go over there and post what they love about Mt Lebanon as well. The tree-lined streets aren't going anywhere. Snow being off the road about five minutes after it hits the ground will most likely stay as well. Hopefully, we can maintain and even increase the achievement levels of our students here in Mt Lebanon. I think we have the right superintendent in place to make this happen. Mt Lebanon is a great place to live. Will it still be that kind of place when folks are paying $7000 a year in real estate tax on a $200,000 home and 1.9% in income tax in three years? My fear is that people in Mt Lebanon and beyond will soon come to realize that living in another community with half the taxes and a similar educational experience will allow them to save enough tax money to pay for their child's college education. There are great things about Mt Lebanon but every current and potential family must weigh those positives against a tax structure that penalizes residents more than surrounding communities.
We have seen communities fall. The City of Pittsburgh has tried for years to tax its way to prosperity and to what avail? From the same article listed above there is the following line:
All the research shows a majority of the municipalities in Pennsylvania are on a path to fiscal distress, with many already there. Currently, 18 municipalities in Pennsylvania are in Act 47 status and an additional 39 in the Early Intervention Program, which means they qualify for Act 47 status but haven’t yet officially entered the program.The City of Pittsburgh has had to resort to gimmicks like forgoing real estate tax receipts for a number of years to new homebuyers in the City to attract people back to the downtown real estate market. However, the never ending cycle of tax increases to fill budget gaps simply pushed more and more people away from downtown and out to the suburbs. The result has been a net population decrease for the Pittsburgh region that was second only to New Orleans between 2000 and 2006. The point is this; the road to prosperity for Mt Lebanon does not include spending as much as possible on a high school and asking our taxpayers to pick up the bill. Not when we are already taxed at a high rate. Not when there are options on the table that would cost significantly less and give us the same student outcomes. And especially not in an economic environment that is so severely disrupted.
These last points are the ideas that I have brought to my fellow Republicans on the Board. I have brought these ideas to them thinking that if nothing else, as Republicans they would have to agree that being fiscally responsible does not include proposing and approving a project that is less than 1% under a voter referendum limit. Instead, that is exactly what has happened. I had conversations with my Republican colleagues on the Board prior to this past budget to suggest ways to improve the budget in order to offset part of the cost of the high school project. Instead there were no changes. I had hoped that at least my Republican colleagues on the Board would agree with me when I suggested this past spring to invest all our surplus from the 2008-2009 budget into the high school project so as to avoid interest expense on 25 years of borrowing that same amount later. Instead, we set aside less. To me these suggestions were mostly common sense. It is quite possible that I am the worst salesman for my own ideas but for each of these suggestions I always had at least one other Board member who was right there with me.
I am not so sure why my expectations were much different on Monday night. But, I showed up on Monday hoping to have a good discussion about why floating the $69 million worth of bonds right now doesn't make sense. I was also willing to compromise and try to find a way to come to the middle with the rest of the Board if they could meet me in the middle on some issues as well. Instead, I got more of the same. I was against spending almost $1 million in interest on bonds that would be floated months before we actually needed the proceeds. It had previously been suggested by members of the Board that floating the bonds now would allow us to pre-buy things that we need anyway. This idea was shot down by our construction manager who suggested that doing the project this way would instead add cost. I was against floating bonds for a project that did not yet have a firm budget associated with it. I was also hoping that the Board would finally adopt a "not to exceed" number on this project. This point became particularly important as we found out that we would be able to borrow over and above the $115 million debt limit that had been previously established. The idea of setting a firm budget did not gain traction. Unfortunately, each of these ideas was shot down by the majority of the Board. In fact, tonight, not only did we vote to begin funding the project with $69 million worth of bonds, but the majority of the Board voted in favor of issuing bonds that in the long run allow us to borrow even more money (scope creep) and will cost us at least $3 million more in principal and interest payments. Between floating the bonds months before we need them and approving the sale of the premium structure of tax-exempt bonds, we just passed $4 million in additional expense on to the taxpayers that will result in absolutely no net benefit to them. I was willing to give on floating bonds earlier than we needed them but I at least would have liked to see the Board take advantage of the Build America Bond program to reduce future tax strain on our residents.
What I don't think has gotten through to some in the party is that one of the reasons Republican's were so resoundingly thrown out of office in 2006 and 2008 is because people absolutely do not trust elected officials who spend tax money recklessly. The Democrats picked up so many seats that they now control both houses of Congress and the Presidency. I, and many of my fiscally conservative friends, could not tell the difference anymore between the elected Republicans of the early 2000’s and the “tax and spend” Democrats that were the nemesis to Reagan when I was growing up. So at this point I have to say I have had enough of the party politics. If the Republican leadership on the Board cannot find a way reduce costs on this project or is unwilling to do so, then any possible argument for party membership is lost.
With that said, I will be leaving the Republican Party and joining a growing number of Independent voters in this country. It is from this position that I will bring my fiscally conservative principles to the Board and will try to govern in a party-neutral manner. This has been a difficult decision for me with the more recent actions of the GOP finally pushing me over the edge. The high school project and the inability to form a cost-saving consensus even among Republicans over the last two years has been frustrating and started this ball rolling. The straw that broke the camel’s back was the nationwide Republican political opposition to the President of the United States giving a speech to our school children about the importance of staying in school and working hard. I will never understand why there was an organized email campaign against this speech and its supposed “indoctrination”. We have ONE President folks and he has earned the right to address our children. If you don’t like what he says then you have the other 23 hours and 40 minutes of the day to “unindoctrinate” your kids. I disagree with our President as much as the next person, but I also respect his office.
Thanks for reading.
James
