Full financial disclosure needed on transit tax
If you buy a car or a home, the seller must disclose the full price, including full debt and interest. That is the law. It protects consumers and gives them full notice of the financial commitment they are getting into.
Why are we not getting the same type of disclosure when it comes to the sales job on a $15 billion transit tax for train and bus expansion in Hillsborough County? Voters will be asked to decide this in November.
We have already heard the sell-in story by key county commissioners and special interest groups: Fund a train and bus expansion of the HART program for "only a penny tax." Is it that simple?
It is really much more than a "one penny" tax. If we pass this initiative we will assume a great deal of public debt, interest and additional taxes that will never go away.
For the sake of bringing the issue forward here is how the proposed funding commitment from our community will be for the period 2011-2040: ticket fare revenue, $1.3 billion, 8.7 percent; sales tax, $7.3 billion, 48.7 percent; property tax/other, $2 billion, 13.3 percent; federal debt, $3.2 billion, 21.3 percent; state debt, $.6 billion, 4 percent; and bond proceeds, $.6 billion, 4 percent. The total: $15 billion.
The key disclosures voters should understand:
It is a 14 percent increase in overall sales taxes and will make Hillsborough the highest taxed county in Florida.
Ticket fares cover a meager 8.6 percent of the cash cost over a 29-year period. This reflects a huge lack of demand vs. project cost. It's an approximate $14 billion net cost.
Our county, state and country will take on significant debt - about $5 billion or the equivalent of $5,000 per local resident.
The interest on the state and federal debt is not included in the cost estimates. If compound interest was included, it would double the cost of the project.
The present operating costs of HART are 64 percent labor, with these expenses growing in 2009 over 15 percent above rider revenue growth. Most of that is growing union labor with contractual commitments that come with it.
The tax increase is planned to never go away. Your kids and grandkids will pay for this decision forever.
Those landowners in the downtown area who stand to gain from rises in their real estate investments will keep all of their profits in land appreciation - gains subsidized by the people.
The estimated costs for operating expenses for running this program include a 2.5 percent inflation rate assumption. This is totally unrealistic and begs that the actual costs will be much higher than what is being presented.
Key commissioners and the mayor cannot clearly articulate where the payback on this project is going to come from. It is time they do this and fully disclose it.
Yes, we do need to address our transit system under a comprehensive plan. That should be done with an accurate comparison with other viable options.
Buses, as one example, are a much lower cost per rider than the proposed ballot initiative. Based on 2009 audited financial statements of HART, it cost the public $7.63 per rider trip for the HART system. The present ballot initiative has an estimate of $13 per rider. That is over 70 percent more expensive than our present bus system. Also beware that the $13 cost excludes the state and federal debt we will assume on this.
A 21st century, professionally managed bus system would pose the smart alternative approach for a county of our size. This would allow us to pay as we go and avoid massive debt. And if demand for transit does not prove an actual need, we can change routes to serve the locations that prove they need it.
We encourage the mayor and select county commissioners to open up on the details of this and even clarify the above if needed. The massive debt and higher cost of these versus alternatives are not being fully disclosed at present.
Voters have less than 60 days to understand what is going on.