One of the truisms of “journalism” is that trade’s famously celebrated ignorance about anything financial. One need only to look at the dying newspaper industry (and The (Monroe) News Star’s shrinking pages) to confirm that when it comes to money, they don’t know what they’re writing about, nor do they have a clue how wealth is created.
They view taking money from taxpayers to finance government pipe dreams as “economic development.”
And so it seems with the latest lunacy by Monroe Mayor Jamie Mayo and their mouthpieces at the News Star for an $85 million, 10 thousand seat civic center. Nowhere in any story is mention made of how it is to be paid for, and how it will impact the taxpayer.
So we did the calculations ourselves.
First you need to know that using sales taxes to pay for construction is not an option, as the combined Monroe/Ouachita Parish sales tax rate is at 9.99%. By law, it can go no higher.
How much each jurisdiction collects, and for what it is dedicated can be found here.
So that leaves property taxes only as a source for money.
Monroe property owners need to know what taxes they now pay and for what the taxes go. Here is a table that depicts the figures.
2013 Property Taxes – City of Monroe, LA
The first column is what each particular millage is legally dedicated to, the second is the rate, the third is total taxable value of property within Monroe, and the fourth column is the amount of revenue seized from property owner over a years time.
Monroe property owners pay a total of about $10.8 million/year in taxes, with a millage rate of 27.15. A mil is 1/10 cent.
The figures come directly from the Ouachita Parish Tax Assessor.
See the complete document here.
If the $85 million cost of the project were to be financed through borrowing, the city’s $200 million debt would balloon to $285 million.
For a 20 year term, the city would pay about 4% interest on the money. That approximately is the present rate for a municipality with a credit rating of AA.
See here bond rates.
That calculates to to about $38.6 million in interest, with total of principal and interest of about $123.6 million. The payment required would be about $6.2 million/year for 20 years.
See here the calculations.
Bottom Line – $6.2 million/year in new taxes @ 15.57 mils tax rate
Total millage and the corresponding tax bite for Monroe property owners would increase about 57%. Millage rates would go from .02715 to .04272, and the total taxes seized would rise from $10.8 million to $17 million.
The owner of a home within Monroe that is valued at $200 thousand would pay about $311 more/year in property taxes.
Of course the figures would vary if the cost of the civic center were more (or less), or if someone could be convinced to help with the financing.
So now you know.