I pay off my credit card debt in full every month. Those in the credit card industry 
refer to my ilk as “deadbeats” because the credit card company reaps no interest from me, only the 3% fee from merchants. I’m fiscally conservative, and it will take more than name-calling to convince me to pay usury-level interest when, instead, I can use someone else’s money for a month for free.
People on the other end of the spectrum make only the minimum payment on their credit card each month. The debt goes on forever while they pay little more than interest only. Their rationale is to ignore paying down the debt because at some point they’ll die and the debt will be someone else’s problem.
Five Orange County commissioners are in the latter camp, foisting more than a billion dollars of debt interest from the Durham-Orange County Light Rail Transit on taxpayers and their children — and perhaps their grandchildren. The loan already stretches out nearly half a century, and because commissioners say they won’t raise taxes to pay overages of DOLRT construction, they will have to refinance to extend the term of the loan and accrue additional interest costs for several years more.
Carrying a large debt load limits what one can do. Holding massive credit card debt prevents you from getting a mortgage to buy a new home or a loan to buy a car. On the county level, that translates into less money for buses that have the flexibility to serve commuters regardless of where housing springs up, and less ability to adapt to changes in transportation technology.
Another theory has emerged as to why the five commissioners voted for DOLRT debt: They believe the federal government won’t contribute funding to the project, effectively quashing it. The Trump budget had no additional money for transit projects. Congress countered with a budget that had money for “Small Starts” — Bus Rapid Transit falls under that category — but no money for “New Starts,” which is the category DOLRT falls into.
The federal government “scores” every project wanting funding to determine whether it is a worthwhile use of taxpayer money. Because the price is so high and the number of people paying it is so low, the federal government may deem the project a poor risk. Unfortunately, by their “yes” vote for DOLRT, the five commissioners have committed to spending an additional $70 million in engineering costs, on top of the $30 million already paid for studies.
By voting for DOLRT, the five commissioners will be able to tell special interest groups that they supported DOLRT and tell taxpayers the $3.3 billion burden has been reduced to “only” $100 million in unreimbursed expenses.
Debt, used judiciously, can be used as an investment to improve our quality of life. For commissioners to use it as a ploy to enhance their political prospects does a disservice to those they represent.
— Nancy Oates
Terri
/ May 8, 2017Over the weekend, a local radio program aired a program that spread inaccurate, misleading information about fluoride and the OWASA board. I keep asking myself how responsible journalists can support the perpetuation of such misinformation.
The claims in this opinion piece are another example, even more egregious by the fact that the reporter is an elected official. The implication for the past two weeks is that those who voted for this project are [fill in the blank: unethical, uninformed, irresponsible] because they didn’t vote the way the author wanted them to. At least your speculation that they are not expecting the federal funding to be awarded was clearly labelled as rumor.
plurimus
/ May 8, 2017The argument goes that county finances are different from household finances in that the county does not (hopefully) have a limited horizon. Theoretically, payments and taxes can go on for ever and always increase at least at the rate of inflation. Investments can go on “forever”
There is a certain amount of truth to that when it comes to critical public serves, police, fire, sanitation, public transit, education and health etc.
I argue that DOLRT is not critical infrastructure, it is a luxury for the few. It is stealing public transportation dollars for an economic development plan that socializes developers risk and serves only the universities who do not contribute. Further, using a regressive tax to do so, DOLRT risks either more taxpayer money or the good credit of the county in the bargain. It starves other critical transportation infrastructure, other economic development and ignores the very purpose of government which is to serve the broader interests. I know a partially rational argument along these lines can be made for Durham, but I challenge anyone to make it for Orange County.
I have yet to hear a convincing argument *for* DOLRT in Orange County.
Anyone who has done the slightest research knows it does not; better the environment, reduce commute times, reduce traffic congestion, reduce sprawl, reduce accidents, help the less affluent by removing the need for a car, or any of the other esoteric excuses I have heard put forth without any evidence. In addition, opportunities for economic development in Orange County are limited by the majority of stations being on university property which remain free from local taxes. Affordable housing will not happen because the state prohibits requiring it and affordable housing is much less profitable to build.
I agree that sometimes in the past I was listening to respond rather than to understand. I am listening to understand now. Would someone please make a cogent argument that supports this “investment”?
Bonnie Hauser
/ May 8, 2017Plurimus – maybe Terri can offer one – because she thinks that the important questions and irregularities that Nancy and others have raised are just “opinion”
Is it possible that the most egregious misinformation has provided by GoTriangle – and unchallenged by most of our commissioners?
George Entenman
/ May 8, 2017Teri – Another possible interpretation – the one I read – is that some of the commissioners who voted for DOLRT really don’t want it to succeed but also didn’t want to upset their supporters. It reminds me of times when David Price voted against his own beliefs simply because he knew that a bill would pass anyway and didn’t want there to be attack ads based on that vote.
Nancy’s tone is critical, but it opens up a way for me to feel a bit better about the commissioners, just as I was able to do with Price. Maybe they didn’t really want to vote the way they did.
Del Snow
/ May 8, 2017Terri, we’ve been having this dance for a while now. I’m still sincerely interested in hearing what you think is opinion versus fact in this current post. Also, how do you choose whose facts to believe – Go Triangle? Davenport?
I fail to see this as Nancy saying “they didn’t vote the way I wanted them to” and found the post to be reporting what has been established. If the commissioners chose to believe overly optimistic sales tax numbers or if they chose to believe that cost overruns would be limited to 30% when the average for this type of project is way higher, it is they that succumbed to wishful thinking.
And yes, I know that they idea that the commissioners voted for LRT expecting the FTA to deny, thereby buttering their bread on both sides is not a fact – just a possibility. I don’t expect anyone will ever know if it is true or not.
David
/ May 8, 2017I think the idea that commissioners voted to approve DOLRT while secretly believing or hoping that the Feds will kill it is too clever by half. Unless I see evidence otherwise, I think we should take them at their words and assume the five commissioners who voted to approve DOLRT did so because they actually believe that it will bestow the benefits its proponents say it will and that they therefore believe it is a worthwhile investment of pubic funds and a worthwhile financial risk. The fact that they believe this—assuming they do— despite all the contrary argument and evidence presented to them is what many find troubling.
Terri
/ May 8, 2017Del,
Happy to oblige. Nancy wrote “Their rationale is to ignore paying down the debt because at some point they’ll die and the debt will be someone else’s problem.” How can that be anything but speculation? Has anyone heard one of the commissioners say this?
“they won’t raise taxes to pay overages of DOLRT construction, they will have to refinance to extend the term of the loan.” Again, speculation unless Nancy has a crystal ball and can see into the future.
“less money for buses that have the flexibility to serve commuters regardless of where housing springs up, and less ability to adapt to changes in transportation technology.” A special pool of funding has been set up for LRT. But the county still has it’s regular funding sources which will continue to be used to fund buses and accommodate technology changes. Wegman’s is predicted to generated an additional $1.7M annually. I expect other such commercial development wins to be forthcoming. Chapel Hill has additional projects as well.
Once again, I am not arguing for the LRT project. I’ve said repeatedly that I am glad I didn’t have to make the decision. What I am objecting to is the divisiveness of the innuendos in these posts. I get it that Nancy, Bonnie and others disagrees with the decision and that is their right. But there is absolutely no reason to belittle those who invested their time and energy into this issue. Reasonable people arrived at different conclusions. Accept it and move on.
Bonnie Hauser
/ May 8, 2017Actually Terri – The only thing that I heard from GoT that is true is that they plan to borrow more money if things get into trouble- and the commissioners have tried to spin that into dont worry about this hitting property taxes.
There is no term of the loan – its an open ended line of credit – and we don’t know what the interest rate or the credit limit will be.
What special pool are you referring to – the transit tax? I don’t believe anyone expected that to be solely for light rail – and since LRT is tying up most of our transit dollars for the next 45 years, the only way to expand bus service is to fund it with property taxes.
Orange County population is growing at about 1% a year- yet the sales tax forecasts assume 3-6% growth every year. the transit tax has declined in the past 2 years – although with the new regressive sales taxes on services, we should do better this year. If there’s a recession or a down cycle, we’re toast.
You see the combination of the sales tax revenue and GoT’s credit rating will set the interest rates on the bonds. Maybe I’m speculating – but I’m guessing the interest rates will be higher than estimated.
The big problems are years away – and many of us would be happy to disagree with the decision if there had been reasonable agreement on the facts and risks,
plurimus
/ May 9, 2017Terri,
Are you saying that the special pool (1/2 cent sales tax) was set up exclusively for DOLRT? I never hear and proponents or the commissioners that voted for this make that point. Where did you get that information?
I do not think that is most peoples perception. It certainly wasn’t mine, and it is not the way it was advertised.
plurimus
/ May 10, 2017crickets………………..
Head Shaker
/ May 14, 2017The problem mentioned is way, way worse than you think.
By the time this ‘light rail’ monstrosity would get built and had to be paid for, it will be FAR more obsolete than if the County had voted to build horse troughs:
https://reneweconomy.com.au/death-spiral-for-cars-by-2030-you-probably-wont-own-one-93626/
You may choose to believe the date mentioned or not, but, denying it’s happening is, well, nuts. Apple stock does not trade for the price it trades for because of iPad sales. Same with Google and Tesla. The latter already sells Level 3 Autonomous capable vehicles. Ford has an entire ‘shadow’ division working on how to stay in business once cars are not something people go to dealerships to buy and own.
I –and many others– work every day on the underlying, required technologies to make this all happen, quickly. We are making fantastic progress.
The 80’s called, and they want their choo-choo train back. Too bad y’all will still be paying for the empty hulks for generations to come.
David
/ May 18, 2017Head Shaker,
Can you tell us a bit more about the sort of technologies you work on? Are you with IBM, or one of the local University computer science departments?
Cheers,
David