No: Really a tax, budget hole is imaginary

Paul Broderick Enlarge photo

Paul Broderick

I love eating pie for breakfast and have my entire adult life. A friend of mine who knows about my habit has been nagging me to switch to oatmeal, now that I’m 40 and ought to know better.

Why would I do that, I argue? I’ve always had pie for breakfast.

Just because we have always done something doesn’t mean it is a good idea or that we should keep doing it forever.

Yet this seems to be the best argument the city can muster for increasing taxes on our electric bills via the LPEA franchise fee.

When asked why we should vote to pay more for electricity, the supporters’ answer is, “We’ve always done it and we really need the money.”

So again I ask: “Does that mean it’s a good idea?” And, who really “needs the money?”

The facts about the LPEA franchise are straightforward and simple. As appealing as some may make it sound, the LPEA franchise agreement is about as good for you as eating pie for breakfast every day for the rest of your life.

First, the city has been anything but transparent about this tax since the first time we voted on it six months ago, when it was justly defeated.

The city calls it a fee, but calculates it like a sales tax on your electric bill. That revenue, plopped right through the city’s pie hole, fattens an already plump general fund.

None of this information was on the last ballot, but the people still recognized it for what it was and defeated it. The final wording this go around was improved slightly, only after lengthy debate.

It’s still pie, just a different flavor.

Second, the LPEA franchise tax isn’t in effect now. Since having been voted down just six months ago, it has had no effect on our electric service. It never will. The franchise tax is simply a device for the city to capture our money for unspecified purposes.

The city threatens desperate cuts and layoffs should this tax not pass. To hear officials tell it, the city of Durango will meet the awful world ending fate the Mayans predicted for 2012.

Not so. The budget hole created by the elimination of this fee is an imaginary one, a bogeyman.

City revenues are up. LPEA is going to increase its rates significantly next year, and likely most years thereafter, which will inevitably raise even more money for the city on the sales tax the city already charges (and will continue to charge) on our electric bills, regardless of the outcome of this election.

The proposed increase to your electric rates coupled with the 6 percent increase in sales tax collected year to date make up half of this shortfall.

Now don’t choke on your pie folks, but the remaining amount is a mere $450,000, which amounts to less than 1 percent of the city budget.

We’re talking the equivalent of cutting $600 from the budget of an individual who earns the median U.S. income of $40,000 per year.

Ask yourself a few questions: Over the last few years, how many locally- owned businesses have had to cut 10 percent, 20 percent, even 50 percent or more from their budgets? How many of their employees were either laid off or forced to take pay cuts to keep their jobs?

How many two-income families became one-income families or had to take multiple, low-paying jobs to make ends meet?

How many college graduates had to face the humiliation of living with their parents because they could not score a job with their hard-earned degrees?

How many people living on fixed incomes were forced to make difficult decisions as their savings account yields plummeted in the face of rising inflation, fees and taxes?

Put down your fork and listen up: Over the last decade, Durango’s city budget increased more than 70 percent while the U.S. per capita income increased 18 percent in the face of 27 percent inflation!

In other words, real income has gone down about 10 percent, while the city’s has gone up 50 percent. And keep in mind, this is after budget cuts the city made in 2009 and 2010.

Everyday we are faced with difficult choices. Fortunately, the choice of how to vote on the LPEA franchise agreement is as easy as pie. Vote no again.

Don’t believe the hyperbole of draconian budget cuts, crumbling roads and dreadful layoffs. Efficiency and prudent budgeting will fill the pinhole in the budget.

Ask yourself, “Can the city give up a little pie for breakfast?”

Don’t you think it’s time the city joins the rest of us and tightens up its belt a notch?

Paul Broderick is a Durango city councilor. Reach him at paulbroderick@ci.durango.co.us.

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