Anyone that has listened to me on the radio in the past few years knows I am a fiscal hawk, which means I really dislike big government spending and the often “porkulus” ways of politicians – right or left.
Unfortunately the Great American experiment of “taxation with representation” has not resulted in responsible administration of the public’s money – not since 1980 anyway!
That said, I have really been struggling with this Bangor arena deal. Why? Because I support the idea of such a facility to provide economic opportunity for the area and I like that the taxpayer isn’t paying for it. However, the debt scares me and so do the risks to the cash flow source we are counting on to make the payment.
I called Debbie Cyr, Bangor’s finance director, for numerous figures and analysis. I should note that she has kindly and quickly responded in all cases. Her efforts are sincerely appreciated. I have talked with supporters, opponents and the “I have no idea” groups. Simply put, I have done a lot of research.
It is going to be tough for me to make it through this one without sounding like a hypocrite, but I am going to try. I risk looking like the hawk who is pushing for reducing spending as long as it’s not in his backyard.
So here we go.
- Reliance upon a 30-year cash flow from the Hollywood Slots to pay for a 30-year financing. This is a long time and a great deal can happen. Longer term equates to more risk.
- The level of debt already in existence is a problem. Do we need more?
- The economic conditions we face, and the likelihood that we will endure very tough economic times in the coming decade, is a problem. Why? Because the demands upon and risks impacting our economic system are serious and severe.
- As a Bangor taxpayer myself, I already know the incredible tax burdens placed upon our citizens. I pay nearly $5,300 a year for a modest 2300 square foot home. I’m in a nice neighborhood but that’s still a pile of money.
- The tax payer is NOT footing the bill. A majority of the repayment is coming from the Hollywood Slots Cascade. That’s a combination of the city’s 1 percent of the state’s 39 percent tax on the facility’s revenue and the city’s rent received equal to 3 percent of net revenue generated. Add to that a $750,000 TIF support which already exists in the city’s realm of options. This TIF will supplement from years one through 20.
- The city’s finances are strong, proven by the most recent audit. While there is clearly too much debt in the public system, evidenced by a $3 trillion municipal bond market and trillions of unfunded liabilities nationwide, the city of Bangor is strong. I’d like to see us flatten spending and lesson the property tax burden in the future but that’s another day.
- The city and its people made an implied commitment to the parent of Hollywood Slots that it would, for the receipt of the cascade, build a facility to further the opportunity of both. To not build this portion of the deal reduces the opportunity for both. With the arena will come growth for Hollywood Slots.
- Both the initial and the ongoing impact to the city’s economy will be significant – a nice offset to methadone clinics and welfare.
To sum this up, a hypocrite I am not, an entrepreneur and optimist I am! With any investment comes a level of risk and with any risk comes the opportunity to lose. In this case if the Hollywood facility fails, the average cost to me and every other Bangor homeowner is about $140 per year. In my risk return analysis that is a worthwhile risk for the opportunity at hand.
Bangor citizens, Please go vote on May 4. Don’t be a bystander. Whether you like it or not you are a stakeholder and stakeholders should always vote!
Joshua Hayward has worked as a financial strategist for 19 years and can be heard Monday mornings at 7 on the George Hale & Ric Tyler Show, 103.9 FM Bangor, 101.3 FM, Augusta. He can be reached at firstname.lastname@example.org