August 9, 2004

Editor

The Cary News                                      

            Re:            "Amendment One" -- Vote No

Dear Sir or Madam:

            The Chambers of Commerce are really pushing for passage of "Amendment One" to the North Carolina Constitution.  This is another version of what is usually called "Tax Increment Financing" or "Project Development Financing".  It has been rejected twice by the voters of North Carolina.  Tax Increment Financing is a scheme to allow local governments to borrow money without voter approval on a much broader basis than currently permitted.  The projects are a laundry list including hotels, golf courses, art museums, and other "quality of life" amenities.  Since voter approved bonds (pledging the full faith and credit of the government) have a lower interest rate and since these projects are so presumably wonderful, WHAT IS THE POINT of allowing these bonds to be issued without voter approval? 

Proponents of Amendment One argue that these projects really don't cost us anything since they are financed by property taxes on the new project that otherwise would not exist.  I suppose if my town would build a swimming pool for my house and I made the monthly payments from the property taxes that would otherwise be due that would not cost the taxpayers anything either.  This argument does not withstand several minutes of scrutiny.  Obviously normal government services to the improved property: police protection, fire protection, the planning department, and schools for the children of the people who work there will now have to be paid for by taxes paid by others.

            No, Amendment One is not real economic development.  It is a recycled scheme to get money out of the pockets of a large and diffuse group of people (taxpayers) and into the hands (usually) of developers of downtown property.  And since these projects would not be built without the government subsidy they crowd out of capital markets other more socially useful investment.  I plan to vote "No".

                                                                        Sincerely yours,

                                                                        Paul Stam

                                                                        P.O. Box 1600, Apex, NC 27502

                                                                        Tel:  362-8873