Palm Bay Works 2009 rejected by voters
May 13, 2009 by Matthew Nye
The $75.2 million Palm Bay Works 2009 bond referendum failed yesterday with 56.5 percent of voters voting against the project. Less than 13 percent of the city’s 60,617 registered voters turned out to cast their ballots.
Some advocates of the referendum, like Palm Bay City Manager Lee Feldman, explained that the program was based on the (Keynesian) premise that government spending on public works projects spurs economic activity, and believe that FDR and the New Deal are what got us out of the Great Depression.
Opponents of the program like Brevard Clerk of Courts Scott Ellis and other students of the Austrian school of economics like myself maintain the government was a major cause of the Great Depression,that the New Deal prolonged it, and that the Palm Bay Works referendum would have done nothing but misallocate resources.
Specific issues raised against the referendum were:
•Inclusion of $13 million in nebulous economic development programs
•Assumed growth of the City of Palm Bay when all state and local indicators show the state and the county are depopulating
•Failure to take into account the fact the property tax rolls in Brevard County will decline by more than eight percent in coming years, resulting in a higher per household cost to taxpayers than advertised
Of the $75.2 million Palm Bay Works 2009 bond referendum:
•$57.5 million would have gone toward road and drainage work.
•$13 million would have gone to economic-development programs.
•$4.7 million would go to capitalized interest and cost of issuance of bonds.
I was personally and partly involved in making sure that this referendum was defeated by talking to my neighbors, friends and families (as well as their neighbors, friends and families) who live in Palm Bay.
I am an appraiser and have been active in the real estate industry since 2003. Before that, I have been working on Wall Street since 1997 as a stock broker and financial advisor. In addition to this, I keep in constant contact with friends and associates of mine who have been in the real estate business for atleast 30 years. So I think I know a little something about the industry and the direction that it’s going. Furthermore, like Mr. Nye, I myself am a student of great economists like Milton Friedman and Thomas Sowell.
When Mr. Nye says, “Failure to take into account the fact the property tax rolls in Brevard County will decline by more than eight percent in coming years, resulting in a higher per household cost to taxpayers than advertised”, that is disturbingly true when you understand the facts behind the statement. In fact, and with all due respect to Mr. Nye, 8% is probably an understatement.
According to the National Association of Realtors for Median Sales Price of Existing Single-Family Homes for the metropolitan Areas of Palm Bay-Melbourne-Titusville, home prices have decreased by 13.4% from 2006 to 2007 followed by a sharper decrease of 21.19% from 2007 to 2008. Couple these facts with rising unemployment and decreasing population, and you will understand why two days after the referendum was thankfully defeated, an article from Florida Today titled “Delinquent Taxes in Brevard at Record Level” (written by John McCarthy) states that over “$37 million … has yet to be paid” (and probably will not be paid).
Unfortunately, due to the economic (government-induced) debacle that will most likely continue until the year 2012/2013, hard-working families and retired senior citizens on fixed income would have been suffering through rising property taxes over the next few years in the midst of a recession – provided this referendum passed. The City of Palm Bay would have been a living nightmare as many of its citizens would have been forced to look for greener pastures, elsewhere.
The answer will NOT come from the government. The answer will come from the free-market. I once heard this statement that I believe is true today, “The Federal Government is the natural enemy of private business”. Anyone who has been objectively keeping tabs on what has been happening in Washington D.C. would agree with this statement, undoubtedly.
Nevertheless, if the federal government is the natural enemy of business, then this will present a great opportunity for local government to be the natural ally of business. In this case, the way local municipalities can be business friendly is by loosening up on certain city ordinances that are non-business friendly (or get rid of them entirely like limitations on commercial building styles, code enforcement, and business taxes), re-zoning to facilitate commercial growth and thereby lessen the property tax load on residential home owners, and stop building non-producing facilities like parks and recreational centers that burdens the tax-payers rather than share the load along with tax-payers.
To put it simply, where the federal government falls short with businesses, the local municipalities can provide a “safe-haven” for the hard work and entreuprenurialism businesses bring to local government. It is this kind of dynamic energy that The City of Palm Bay needs for growth and prosperity, and not the dull murmer and dim light of failed-government “solutions” (or should I say … problems).
We all should be thankful!