Politics in an Odd-Numbered Year II: Trailer Trash Talkin'

Golden Gait Trailers will relocate to Kannapolis next year [link to story] . The company is looking to more than double it's workforce in the next few years and they are going to do it in the "City of Looms" (for those who failed Greek, that's Kannapolis). So, a $4 million-dollar facility will be built, employing about 100 people when it comes to full-speed. The City of Kannapolis and Cabarrus County are so happy about it, they are giving this small, locally-owned business modest tax incentives, but still projecting a net gain of $80,000 in tax revenues (after the incentives). Golden Gait is happy about it. I'm sure about 50 of the few hundred people in the area looking for a job is happy about it. Who wouldn't be happy about this?

Harold Smith.

His weekly post at www.goharoldsmith.com actually sees a problem with this. See for yourself:

May 30, 2005: Who runs the County; John Day or the Commissioners?
Cabarrus
County Commissioners gave $28,000 tax incentives to Golden Gate Trailers in
their last meetings and at the same time announced recommended 19% property tax
increases on their citizens. Something is terribly wrong with that scenario.
When Coy Privette requested a guarantee of the 100 jobs promised by Golden Gate
Trailers, he was voted down. John Day had already committed to the tax decrease
for Golden Gate Trailers according to Bob Carruth. Who is running the county;
John Day or the Commissioners. Is it right to give a new comer a tax decrease
and at the same time recommend to increase the citizens’ property taxes by 19%?
Something to think about! Harold Smith

OK. First, let's just run the numbers on this. If the only economic impact this company has is its headquarters, both the city and the county make at least $10,000 a year for the first five years in fees, taxes, etc. AFTER the incentives. Right now, they aren't making anything from Golden Gait. But Golden Gait is looking to ADD about 50 jobs. Let's be conservative and state that only 25 of those jobs will be filled by Cabarrus County residents, BUT those residents have special skills and have moved to the area. Remaining conservative, about half of them buy houses and pay, on the average, $1,000 a year in property taxes on houses and personal property. That's $12,000 (I gave up the extra half person for those using a calculator) plus the $10,000 that's coming from Golden Gait. $22,000 per year that the city and county aren't getting now that they will be getting in direct tax revenues from Golden Gait and its new staff. The county invested nothing. We haven't even gotten started about all of the revenue from construction, sales taxes, increased local sales of goods and services, etc.

Obviously, Harold Smith either didn't do the math or he's got a problem with incentives for "new comers". So, did he cry foul with all of the incentives that Pillowtex got? How about Corning? Those incentives aren't paying off for anyone now.

When the Cabarrus Taxpayers' Association-backed candidates controlled the Board of Commissioners, plenty of businesses got incentives. I looked through Harold Smith's website and I couldn't find him complaining once about any of those. Obviously, his latest rant has nothing to do with economics and has everything to do with bullying a political enemy - John Day and the majority of the Commissioners (Juba, Carpenter, and Carruth).

City elections come up this year and county elections come up next year. Do you want candidates who have something against outside businesses coming in, building stuff, paying taxes, and creating new jobs? Well, maybe Harold Smith is your man.

Bruton's Millions

Last week, Bruton Smith, Chairman and CEO of Speedway Motorsports, Inc., proposed building a monorail between the proposed NASCAR Hall of Fame and the Charlotte Motor Speedway here in Concord [link to story] The funny part is that he didn't just ask for one, but he offered up $50 million to start construction.

Now, before you start thinking North Charlotte is going to turn into EPCOT, let's keep a few things in perspective here. One mile of light rail costs $44 million to build - at least when Charlotte does it. Monorails can be about three times that cost. So, our local billionaire isn't going to foot the bill himself. Another theory - Tommy Tomlinson of the Charlotte Observer considers that Bruton Smith may be crazy. Then again, all of this was brought about because of the bid for the NASCAR Hall of Fame. Charlotte is up against Kansas City, Daytona, Richmond, and Atlanta. Maybe he's crazy like a fox, constructing a ruse to make Charlotte just that much more attractive to NASCAR. Solid arguments for why Charlotte should be home to the NASCAR Hall of Fame aside; because there's no other place that's historically suitable for it, why would Bruton Smith propose such a thing?

Just to clear things up, Bruton Smith is no tree-hugging, social engineering, George Soros-type of billionaire. He made contributions to prominent Republicans like Elizabeth Dole, Kay Bailey Hutchison, and Dick Armey in the past ten years. He also got into a well-publicized fight with Charlotte officials over some trees he cut down near the Speedway last year. So, he ain't doing this because of his abiding love for the city government.

Is there an operational, privately-funded, public mass-transit system in the United States? Some would argue that public-transit is a service which would be revenue-neutral - at best. People on the conservative end of the political spectrum have always been skeptical unless it's the Metro in DC. People on the liberal end want mass-transit to serve all of the places that nobody really wants to go - think MARTA. But consider for a moment a public-private consortium, a rail system built by business interests with zoning and some public financing, focused on getting people where they would want to go (not necessarily to work) and what type of development would get built around that? Would it be plagued with all of the political silliness that tends to follow commuter-rail projects? How would it change the character of the community? Would it make other communities in the nation more or less likely to look into commuter rail?

Politics in an Odd-Numbered Year

For my first post, I figured I'd tackle something that has been bugging me and other people in my community.

The website of Harold Smith. More specifically the content of the site. Filtering through the grammar mistakes, someone who knows the facts usually reads in disbelief and moves on. It's easy enough to dismiss the rants of this guy; but a number of people listen to him. So, I have taken it upon myself to address the silliness found in most of his posts. Let's take a look at the latest one. Here's the text:

May 24, 2005: Where is Richard Suggs?
Where is
Richard Suggs? Oh, the good old days when their was fiscal responsibility by the
County Commissioners. Richard Suggs believed in fiscal responsibility. County
Manager John Day is a loose cannon with Carruth, Juba and Carpenter supporting
his 19% increase in the property tax rate. The proposed property tax rate is
$.63. They have gone wild. The taxpayers are in deep trouble! The commissioners
(Privette and Freeman) who represent the taxpayers are in the minority. It will
take a revolt by taxpayers to save the day. The silent majority must speak out.
The first step is to reduce the salary of County Manager, John Day. The next
step is to go through the budget line item by line item and challenge every
expenditure. Legal services would be a good place to start. Will the majority
(Carruth, Juba, and Carpenter) have the courage to do so or will they give
everyone an open check book?

Taxpayers, let your displeasure be
know. Let your voices be heard!
Harold Smith (A fighting taxpayer and voter)

Let's break this one down bit-by-bit. First, where is Richard Suggs? That question is best answered by first asking this: where isn't Richard Suggs. After one term as commissioner, Richard Suggs faced a decisive defeat in the Cabarrus County Republican Primary last year. This means he isn't serving on the current Board of Commissioners. This happened largely from his involvement with the Cabarrus Taxpayer Association, a group which recently opposed the local school bond referendum and backed a number of candidates who were quickly rejected by the voters the first time their names found their way on the ballots. Thus, the voter's rejection was not so much of Mr. Suggs; but of the decisions that he had made by allying with the Cabarrus Taxpayers Association.

Second, the "fiscal responsibility" referred to in Mr. Smith's rant should be brought into terms of actual dollars. A quick review of the audit reports from the County and the State reveals the following:

• According to the North Carolina State Treasurer, the nature of the debt was reversed in a mere four years (2000-2004) from the majority of debt secured by the agreement of the taxpayers by referendum, known as General Obligation debt, to higher-cost debt that the Commissioners agreed to. In FY2000, from 62% of the debt that was agreed by the people of Cabarrus County to FY2004, where less than 30% of the debt was General Obligation and the rest agreed upon by the Commission alone.
• The percentage of reserve funds available relative to County Expenses was cut in half during that period. So much so, that the County's current bond rating is in jeopardy.
• In comparing the audit reports posted by Cabarrus County for period ending June 30,2002 (as far back as I can find on the County website) and the period ending June 30, 2004, the outstanding debt increased from $133 million dollars to $177 million dollars. That's more than 30% in three years. This increase was so dramatic that the manager's report in 2002 stated that the County's assets were greater than the liabilities by $3 million, but by 2004 the County is in the red by $16 million dollars. Not a dime of this debt increase was approved by the people of Cabarrus County.
• During this time, property taxes were actually cut in 2004 (against the recommendation of County Staff) by $0.03 on the $100 valuation from $0.56 to $0.53 or 5%.
• $0.56 is the lowest rate for 1993 to 2000, with the average being $0.61. A review of economic indicators (retail sales, per capita income, housing starts) would not suggest that the average $0.61 rate was burdensome.
• All of this aside, I can't find a budget during Mr. Suggs' tenure (where he was part of the CTA-backed majority on the Board) where the county didn't spend more than it took in. A very basic definition of "fiscal responsibility" would be to not spend more than you take in and use debt wisely.

I'll leave it to you to ascertain the fiscal responsibility of the Board of Commissioners over the past few years, how reasonable a $0.61 tax rate is, and how likely it is that Juba, Carruth, Carpenter, and Day will show up in the next "County Officials Gone Wild" video. What's interesting is the rest of the post.

The taxpayers are in deep
trouble! The commissioners (Privette and Freeman) who represent the taxpayers
are in the minority. It will take a revolt by taxpayers to save the day. The
silent majority must speak out. The first step is to reduce the salary of County
Manager, John Day. The next step is to go through the budget line item by line
item and challenge every expenditure. Legal services would be a good place to
start. Will the majority (Carruth, Juba, and Carpenter) have the courage to do
so or will they give everyone an open check book?

You say you want a revolution? Well, a rather well-behaved majority of Cabarrus County citizens agreed to a tax increase in the form of a Bond Referendum during the last election, so the silence he's referring to may not be coming from the same majority that voted. Once again, I'll leave it to you to determine why Mr. Smith is hearing silence.

What's really interesting is the two things he suggests - cutting John Day's salary and looking into legal services. At the end of last year, Suggs, Privette, and Freeman were fixin' to give the County Manager a pay cut in the form of dismissal in December; but Joni Juba was sworn in before that could happen. People associated with the Cabarrus Taxpayers Association have been attacking the County Attorney Fletcher Hartsell - ostensibly over his fees. However, his support for a bill allowing the Board Of Commissioners to put a Sales and Use Tax Referendum on the 1998 ballot did not sit well with some, making him a favorite target of CTA associates. Harold Smith has some interesting writings about Senator Hartsell. Could this be the CTA trying to soften a formidable challenger? The senator has a long, venerable career backing common-sense proposals and actually winning elections - if I were affiliated with the CTA that would make me mad too.

This being an odd-numbered year, we in this community we need to find ways to rise above empty rhetoric, learn from our mistakes, and make real plans for our future. The current Board of Commissioners is doing just that. The proposed tax hike is going to be rough for me...for all of us; but we can't borrow and spend forever.

As for firing John Day and Fletcher Hartsell, Harold Smith and his supporters may get the chance next year. Richard Suggs stated he'll run again...in the next even-numbered year.