So Many Errors, So Little Time

The following missive was sent to the brevardpoliticaljournal.com in response to an article I had written identifying the latest Palm Bay tax-borrow-and-spend ‘job creation’ program to the New Deal of President Franklin Roosevelt and his Brain Trusters. I have always said once an individual moves off the track of facts and moves onto the tracks of personalities, it is a sure fire way of knowing they realize they have lost their argument on its merits. The author below clearly recognizes his cause is lost on the factual debate. So, let me respond to as many comments below as I can in one night.

Right from the beginning, there is no effort made to distance the Palm Bay Jobs Referendum from the FDR New Deal on principle. The only difference between the Palm Bay Mini-Me New Deal and the real thing of 1933 is Palm Bay residents get to vote on it. Glossed over is the fact the city cannot issue bonds based on property taxes without a refendum thanks to the Florida State Constitution, not the benevolence of Palm Bay. I am not sure where the comment on my ‘distrust of voters’ came from, if the citizens of Palm Bay are foolish enough to entrust millions of dollars to their politicians for ‘job creation’ they will certainly have little to complain about as the expenditures travel to the pockets of the well-connected. It is NOT that Palm Bay trusts the voter, it is the law they MUST have the referendum. I am quite sure if the Constitutional requirement for referendum did not exist neither would the referendum, but you could bet the bonds would all be issued.

According to the author I do not understand anything about asphalt from my years on the County Commission and in the Clerk’s Office, unlike someone with a few years on the Palm Bay City Council. I understand that during my hitch on the County Commission we accomplished the major widening projects of Minton and Malabar Roads in Palm Bay (amongst others), and I kicked off the planning phase of the Palm Bay Beltway at the County level. Perhaps my Palm Bay Council commentator does not know I was not on the County Commissions from 2000 – 2008 that did not do road projects. Before I took my latest job as ‘paper pusher’ overseeing Court Records, Official Records, and County Finance, I did another stretch in engineering. Now being as our Palm Bay councilman is a Financial Advisor, I am not sure how his job is NOT one of paper pusher, but I guess the description only applies to those whose time on a much larger County Commission exceeds that of one’s time on the Palm Bay City Council, and one’s knowledge of following local government for over 20 years pales to one who has yet to live here 20 years. I have already sent all a list of numerous suggestions for ‘saving puppies’, and evidently challenging the County on grossly overpaying for land, breaking the CAPIT amendment, and attempting to issue unlawful bonds is ‘chutzpah’.

On Point 1, the only part of the plan the voters will own, should they pass it, will be the debt. The expenditure decisions will be made by the City Council. It is correct I will have no vested interest in paying for it as I do not live in Palm Bay. The Clerk is one of the highest paid elected officials in the County, and as such I will guarantee I put in more hours on the job than any of my contemporaries. As for the “many, many years” as Clerk, the correct number is 8. I guess 8 seems like many, many to a seasoned veteran of 2 years on the Palm Bay City Council.

On Point 2, our Certified Financial Adviser commentator continues in his remarks as to how little I understand their bonds. Quite the contrary, it is our CFA friend who is making foolish repayment assumptions. The Palm Bay bond issue will be based on a One Mill tax to be collected over 30 years for a maximum bonding capacity of $75 million. The belief that portions can be paid early is based on the belief (1) the taxable value of Palm Bay will remain static or rise and (2) the City will not choose to continue the millage at the maximum amount just because they can. Brevard County’s financial geniuses have made the same error with all of the Park Bonds, in that a falling tax base lowers the revenue generated by a fixed millage. Palm Bay is the most overvalued property tax roll in Brevard County, a county with nothing but declining values. As the taxable value of Palm Bay declines they may find a few years after issuing their bonds the one mill pledged may not even cover the debt service.

On Point 3, a very odd point, I fully agree Palm Bay is overly dependent upon residential taxation, a fault based on Palm Bay’s own onerous codes and zoning which inhibit commercial properties. There is a reason the north side of Palm Bay Road is so heavily commercialized, it is not in Palm Bay and not subject to Palm Bay code enforcement, zoning, and building rules. I would say it is a bold assumption Palm Bay is equal to all in codes, even Melbourne does not mandate tin roofs. Of course, had our commentator truly desired to diversify the Palm Bay tax base, he would be more than welcome to move his place of business from Melbourne to Palm Bay. One could be just as aggressive at cutting regulation and fees as being aggressive about raising taxes to redistribute to others, but the former only rewards entrepeneurs while the latter rewards those who have the proper connections. Now I am not a CFA but only a lowly Computer Science/MBA guy, but I think the statement “That expense ($13 million in taxpayer dollars) only has to contribute to the attraction of $13 million of commercial/industrial development to essentially be cost neutral to taxpayers. ” really says nothing while portraying to say a lot. $13 million in commercial development will generate about $800,000 a year in property taxes. I suppose this is to be equal to the debt service on the bond, but of course any business which happens in Palm Bay will be said to have been generated by the ‘contribution’ of the taxpayers subsidy.

On Point 4, “Breaking the city up into voting districts for essential and common use municipal services is ludicrous. ” may be ludicrous, but it is practical and used in Counties throughout Florida. It is called an MSBU, an apportioned tax (same for all homeowners) to pay for localized capital improvements. It has been used in Brevard County to pay for Units of paving in Canaveral Groves, water lines, and dirt road paving. But I know, being on a much larger County Commission fails to give one the extensive knowledge gained on the Palm Bay City Council. After all, it is expected that those whose roads are already paved will gladly pay more money to pave the roads of others, as so successfully demonstrated in the last road referendum in 2005. Now as for me being an individual who will ally with no one, when no one else seems to share my same belief in liberty and limited government I concur. Rather than go along with the Big Government crowd, I truly do prefer to stand alone if need be.

The final comment is quite Byzantine. “If the same voters that repeatedly elected Ellis decide this May to rebuild their own roads and invest in themselves, which vote will ultimately lead to a more tangible and beneficial result in their lifes?” Evidently a vote to donate $13 million to the Palm Bay Council to launch a miniature version of ‘taxing yourself to prosperity and jobs’ New Deal has a more beneficial result than voting for Scott Ellis for Clerk of Courts? This reminds me of the NetFlix radio commercials where two disjointed statements are joined as if causal, such as “If a tree grows in Brooklyn, what color is a new car in Minneapolis?”

I am not sure of the great long term benefit of voting for Scott Ellis other than it sure beat the alternative, but I will definitely state now and have always stated no one and no government can tax and borrow and spend themselves into prosperity. Government job programs always fail, the only alleged measure of their success is the government jobs created by taxes seen versus the other jobs destroyed by the same taxes not seen.

The issue is not a Road Referendum. The issue is a Pork Referendum embedded within a Roads Referendum. If the real issue were roads the Road Referendum would stand alone, and the Jobs Subsidy Program would stand alone. They are tied together as a means of using the roads as a stalking horse to make way for the pork.

If our commentator truly believes the citizens of Palm Bay desire both, then split the two issues into two referendums and prove it.

From Brevard Political Journal:

To the Editor:

I have a few comments about Joe Pearce’s views at the end as well, but regarding Scott Ellis’ rant on the “New Deal in Palm Bay”, show me where Roosevelt, or any other president actually put their plan to paper, with specificity, and put it out to their constitutents to decide (for themselves, egads!) whether it passes muster or not? Did my grandparents vote on the New Deal? No. Did “W” put his government-bloat-with-deficits-to-the-moon plan to you or I? No. Will Obama? No. Ellis’ apparent distrust of the voter is really interesting.

Ellis doesn’t understand asphalt, doesn’t understand the financing plan, and doesn’t have a credible base on which to stand and attack either. Given the long-standing transportation deficits in this county, the only thing anyone knew about asphalt when serving on previous county commissions, as Ellis did, was that the first letter in the word is “a”. His credentials since that time include the management of pushing paper from one desk to the next and playing Whodunit on matters on which he has far less expertise than chutzpah. Last week he was saving puppies, now he’s a transportation expert.

Ellis’ ‘analysis’ is this case is based in dogma rather than fact and does little to present a valid counterargument that can be (wait for it.) useful.

Point 1: Palm Bay voters will decide whether the plan moves forward, not the city council. The city council owns responsibility for the $70,000 expense of putting the Palm Bay Works plan to voters. The voters own the plan and the consqeuences of it, whether it passes or fails. I could care less if If Ellis doesn’t trust them to make a reasoned decision, because he doesn’t live in Palm Bay and has no vested interest in the future of my city. Our residents do, and they will have the final say. The crowd in my left ear–those who want the roads, drainage and some effort to build something other than houses in Palm Bay–can pit themselves against the crowd in the right ear, who either want none of the above or something other than what’s on the table. It’s called democracy. That same democracy has been not only buttering Ellis’ bread, but baking and serving it, too, for many, many years as one of the highest-paid elected officials in the county. The ‘tyranny of the majority’ (credit Bruce Wechsler for that gem), indeed.

Point 2: Thanks to Ellis for pointing out that asphalt lasts 20 years. The average maturity of the series bond that’s proposed (had Ellis read the information attached to his own email) is just under 20 years. The bond is structured as a series of issues, with maturities ranging from 2 to 30 years and a maturity each year. By the current plan, $14.3 million will be paid off in the first 10 years. $23 million will be paid in the next 10 years, with the remainder paid off in the last decade. The total cost of normal resurfacing and repair in the plan is less than the debt retired in the first decade. Why does this matter? Because the debt is matched much better to the expected life of the various investments than it would be if it was a 30 year bullet (all paid at the end) bond. Road surfaces last 15-20 years? Paid for over its life. Road base that lasts longer than the bond? Paid for over its life. Drainage that lasts even longer? Paid for over its life. Shorter lifespan elements, including maintenance of the roads, will be funded from the annual city budget. I have many, many, many issues about boneheaded, unrepentently optimistic decisions various city councils have made, but this is not one of them.

Point 3: Ellis doesn’t live in Palm Bay, so his apparent comfort with the City’s current economic diversity (or profound lack thereof) means nothing to me. I have a terrific argument against the status quo: look around. It is not only visual, but factual as well. According to property appraiser data for 2008-09, Palm Bay’s tax base is woefully undiversified. The city’s tax base is 10.1% commercial, versus 24.7% in Melbourne, 18.8% in Cocoa and 17% in Titusville, and no, Palm Bay’s municipal building code had little to do with that, nor does the Palm Bay Vernacular architectural style. The same situation exists in the industrial tax base, which is 3% in Palm Bay, versus 7.8% in Cocoa, 5.9% in Melbourne and 4.5% in Titusville. The result? A higher share of the tax burden on Palm Bay residential property. City
government can ‘get out of the way’, as Ellis likes to prattle about (Who, after all, really needs a stupid building code? Where are we, in the sweat shops of Bangladesh?), but assuming all cities are roughly equal in terms of their code, Palm Bay has a deficit.

Status quo says that doesn’t change, so we need to do more, we need to be more aggressive, and yes, it will cost money. The benefits of success are too numerous to list, but first among them to take some of the overall tax burden off of Palm Bay residents. The economic development sleeve Palm Bay Works plan costs $13 million if fully expended. That expense only has to contribute to the attraction of $13 million of commercial/industrial development to essentially be cost neutral to taxpayers. To understand how achieveable it is, the city’s overall tax base is roughly $5 billion.

Point 4: Breaking the city up into voting districts for essential and common use municipal services is ludicrous. If a unit wants landscaping, they can vote and pay for it themselves. If it’s roads, police or fire, it’s a shared goal for all. Palm Bay is a city where 106,000 people have a shared interest. What happens in one corner of the city–whether it’s crime or depressed property values due to failed roads–matters to the rest. Ellis is an individual who wants to ally with no one. I welcome his incorporation as a city, state and nation of one.

If the same voters that repeatedly elected Ellis decide this May to rebuild their own roads and invest in themselves, which vote will ultimately lead to a more tangible and beneficial result in their lifes?

Milo Zonka