This stadium thing bite me royally. Why do we need a new stadium commission for this stadium? What about our current sport facility commission? Why can't the county own and operate it themselves instead of this new commission? Seems like were just adding one more layer of bureaucracy bleeding the system dry.
Good idea to collect a bit more than required and pay off early, but will the tax truly go away after this thing is paid for? I ask this because it seems like many on this list were not aware that the previous stadium tax did go away. Ron Leurquin Nokomis East David wrote: The tax raises $28 million a year - but the amount needed to pay bondholders is $21.5 million. The county would net $6.5 million more annually than it needs to pay out. Why collect more than you need? To guard against events that cut your sales tax proceeds - say, a recession. The county is collecting 25 percent more than it needs, a very healthy cushion, especially since the sales tax is a very stable revenue source. The county will likely receive MORE than $28 million annually - because inflation and real economic growth also inflate sales tax collections. Collecting more than you need cuts your borrowing costs. You're more likely to pay back the bonds, which makes them less risky to buy, which lowers the interest rate investors need, which cuts your financing costs. The money you collect over $21.5 million doesn't go to the bondholders. It's yours to pay off the principal - and more quickly pay off the bonds. Here's a scenario to illustrate: * The county needs $353 million for its share of the ballpark, area improvements and bond insurance, etc. * It must also fund $1.4 million per year for a capital improvements account and $600,000 a year for a new Ballpark Commission. Those expenses rise with inflation, which we'll estimate at 3.5 percent per year. (David didn't include these expenses, but they're there.) * It sells 30-year bonds with a 4.75 percent interest rate (the county's current projection) * Sales tax proceeds rise 3 percent annually (less than our inflation assumption, so conservative) If these happen, you pay off the stadium in 15.5 years, not 30. You'd pay $170 million in interest, not $490 million as David calculated. I also plugged in some more pessimistic numbers: sales tax proceeds don't grow at all, 5 percent interest rate, 5 percent annual inflation in ballpark and commission expenses. Stadium payoff: 24 years. Interest expense: $257 million. REMINDERS: 1. Be civil! Please read the NEW RULES at http://www.e-democracy.org/rules. If you think a member is in violation, contact the list manager at [EMAIL PROTECTED] before continuing it on the list. 2. Don't feed the troll! Ignore obvious flame-bait. For state and national discussions see: http://e-democracy.org/discuss.html For external forums, see: http://e-democracy.org/mninteract ________________________________ Minneapolis Issues Forum - A Civil City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[email protected] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls REMINDERS: 1. Be civil! Please read the NEW RULES at http://www.e-democracy.org/rules. If you think a member is in violation, contact the list manager at [EMAIL PROTECTED] before continuing it on the list. 2. Don't feed the troll! Ignore obvious flame-bait. For state and national discussions see: http://e-democracy.org/discuss.html For external forums, see: http://e-democracy.org/mninteract ________________________________ Minneapolis Issues Forum - A Civil City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[email protected] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls
