The Commercial Appeal printed an article on Sunday showing that Shelby County debt now stands at $1.7 billion and will increase to $1.9 billion by 2009. They go on to applaud County Mayor AC Wharton’s stewardship (even though debt continues to rise on his watch and he tells us to expect it to go on rising through the entire decade).

And what is Wharton doing so well? For one, he expects to gain another revenue source. That is, he is planning on passing his spending problems on to the taxpayers through one of two ways: a real estate transfer tax (which will impact the housing boom and drive even more homeowners out of the county) or a property tax hike of as much as 19 cents (again, new homeowners will leave the county).

In addition, county government will have to stick to its pared-down CIP (capital improvement program) budget and spend no more than is planned.

“The key,” Wharton said, “is discipline.”

The key is staying within your budget to begin with, but it’s too late for that.


County Trustee Bob Patterson was at the Bartlett GOP meeting last night and was a little peeved at the Commercial Appeal’s spin on the debt. According to Mr. Patterson, the current debt should be viewed as being a tad over $3 billion because that is what it works out to if you include the interest payments:

Shelby County Bond Indebtedness

as of 31 July 2005
Outstanding Debt

Bonds Authorized and Issued (Schedule)

     
   
Principal $1,764,129,948

Projected Interest $627,198,610

      Total $2,391,328,558

 

Refunded (Defeased) Bonds Authorized and Issued (Schedule)

Principal $431,855,000

Projected Interest $254,862,562

Total $686,717,562

 

Total Outstanding Debt $3,078,046,120

 

Future Debt

Authorized but Not Issued (New)

Schools Bond Authorized 7/25/05 $280M Issued $0M
   
$280,000,000

2005A EMPC Remaining — Authorized $275M Issued $30M $245,000,000

Total 1 $525,000,000

 

Authorized Principal and Interest $3,603,046,120

 

Less Defeased Escrow @ 31 July 05 2 ($452,611,960)

Net Debt Authorized $3,150,434,160

1 Principal only, interest is calculated when bonds are issued.
2 Principal and interest through 30 June 05. Waiting on projected interest from Escrow Companies.

While it is true that the debt of Shelby County taxpayers is over three billion dollars, I will defend the Commercial Appeal (first time ever!) by saying that we don’t typically include interest payments when thinking about debt. If I owe $100,000 on to a mortgage company I say I have a debt of $100,000. I don’t refer to it as a commitment to pay $175,000 over the next 20 years.

On the other hand, Bob has a point. The taxpayer burden is over $3B for our current debt. And seeing as the number of taxpayers is far below the number of people (about a million), there is little doubt that my household’s portion of this debt runs into the many thousands of dollars, if not tens of thousands.

I’m looking for a place to build a house and out of the county is looking more and more attractive.