Tax Increase
Dear Editor: As an investor I have spent many hours, over the last 30 years, reading financial reports of companies that I would consider investing in. I have tried to read and understand what makes a company successful, and what can lead to failure. Sometimes smart people make very stupid financial decisions. I have seen people buy more house than they can afford, new cars they really could not afford, and all sorts of toys they really didn’t need, but felt they deserved. I have been a contributor to the city tax rolls for more than 50 years, and in my humble opinion have concluded that our collective wants are more than our collective tax base can afford.
Our city Assembly decided to go forward with a dam that cost almost 150 percent over the original estimate. At that point it was a poor investment. No private utility company would have invested $145 million in a dam that would only produce a mere 10 megawatts of additional power. Never would have happened, not for 4,000 customers. According to my beer napkin calculations we would have to raise the electrical rates by more than 50 percent to satisfy that debt, to about 20 cents a kilowatt hour. We had a $4,787,022 projected shortfall of funds to break even on the new dam for 2016. Our assembly said we could afford the dam. Now either raise the rates to pay for the true cost of our debt, or explain how you will cut cost in our city government to absorb your miscalculation.
The idea that we should raise taxes from property or city sales to pay for this shortfall is playing something akin to three card monte. They can raise those taxes and fees and they still have not solved the problem, and after they raise the taxes and fees they will still come back for more tax increases to solve the original problem, and a year later they will come back to the citizens and hope they have forgotten the original blunder.
We need an honest assessment from the city manager on the real rate needed to balance the utility debt and bond requirements. Only then will we know the real hole we are in. Until I see the city publish and explain to the people of Sitka this real cost, I will oppose all tax increases. The Assembly may want this, or they want that, but they are not financial analysts. The city management is well paid for their expertise and I expect them to be straight and lay all the cards on the table.
We may have to cut services and that will hurt. That pain I will understand, but I can not quantify the pain of all the tax increases and there effect on our citizens.
Randal Rodgers, Sitka
