FACT CHECK: Borrowing Will Raise Taxes, Water Bills

Cape Charles Wave

(EDITOR’S NOTE: The writer was an international economist for the U.S. Department of State in Washington, DC. Earlier as a newspaper reporter he and his wife were privileged to spend an afternoon with Nobel economist Milton Friedman and his wife Rose at their Vermont mountain home, where Friedman taught them about the “tooth fairy.”)

December 5, 2013

Our neighbor Wren lost his first tooth the other day and the tooth fairy gave him five dollars. But his mother says that’s a one-time thing; future teeth will get only 25 cents. So Wren is destined to learn that the tooth fairy is a variable and capricious spirit.

Meanwhile, Cape Charles Town Council has been told it can refinance current debt, borrow an additional million dollars, and save money in the bargain. Taxpayers have an opportunity to address Council tonight (Thursday, December 5) at a 6 p.m. public hearing at Town Hall.

Town Manager Heather Arcos advises that “the projected total debt service for both the refinanced loans and the new projects will be less than the Town currently pays.” She got that from financial advisor David Rose of Davenport & Company.

The Town is thinking like the customer for a new car who says, “I don’t need to know how much it costs – just how much the monthly payments are.”

At last Tuesday’s work session, Council member Mike Sullivan said he wants no tax increase and no utility rate increase. But he’s OK with borrowing more — “if we can finance improvements under the existing debt service.”

Council member Steve Bennett said, “Maybe we could have a tax decrease next year.” [Read more…]