Guest opinion by David Warren–
At a recent community meeting in Citrus Heights hosted by Supervisor Sue Frost, some of the individuals present complained about the poor condition of roads in our city and noted potholes going unrepaired for a significant period of time. Supervisor Frost noted that she had personally incurred an expensive automobile repair associated with poor street maintenance, which she also repeated in her newsletter.
In Los Angeles, City Councilman Joe Buscaino proposed a $3 billion plan to fix thousands of miles of the city’s most deteriorated streets, with potential funding coming from asking property owners to increase taxes by the equivalent of 1% of their property’s value, paid over 29 years. On a home worth $600,000, that would mean paying about $200 more a year. The new revenue would be used to resurface and rebuild the city’s broken streets, part of a 60-year backlog of repairs. Why hasn’t this been done in Citrus Heights?
Citrus Heights City Council members repeatedly brag about the lack of civic debt. Regretfully, the municipal balance sheet does not reflect the accrued street and curb repair costs.
Although an effort was made in 2012 to increase taxes to pay for these repairs (along with other public services including an increase in the number of police officers), the ballot measure failed, which means more and more unrepaired streets and sidewalks. Regretfully, the city council has adopted a policy of “pay as you go” — which is okay for operating expenses, but foolish when postponing repairs — instead of increasing taxes or borrowing to make repairs.
Unfortunately, the Citrus Heights City Council fails to acknowledge the obvious solution demonstrated by the following example. Assume that the roof leaks on your home. Delaying repairs in fact increases the cost of making repairs. Each time it rains, the water enters the home and will cause, at best, damage to the wood frame and wall services. At worst it will damage the utilities inside the home, and possibly introduce mold. Delay in making the roof repair dramatically increases the repair cost.
There are two ways to pay for the repair: either save enough money to pay for the new roof or borrow to pay for the new roof. The false assumption is that the first alternative will cost less because there is no borrowing interest, assuming that the individual does not have increased earnings to pay for the roof.
Failing to either increase taxes and/or borrow to pay for municipal street repairs is a false economy. Each day that street repairs are not made, the cost of making the repairs increases — both because the street damage increases, along with increased labor and material costs for the repairs. Further, bad streets increase automobile wear and tear, the repairs being a “tax.” Paid injury claims due to bad streets and sidewalks are also a “tax.”
A further cost of saving, instead of borrowing or increasing taxes to pay for repairs, is the simple fact that the benefit belongs to those individuals who have not paid the taxes to make the repairs. In other words, the benefit of the repairs is for those that use the streets after the repairs are made, rather than for those that have paid taxes for years for repairs that might be made years into the future.
Guest Opinion: here’s why our roads are in horrible condition
A basic economic principle is to examine the present value of an expense discounted for future use. The discount is determined by comparing the estimated cost in the future for the repairs with the interest costs over the term of the loan with the current cost of the repair. The current period of low interest and low inflation made it beneficial to borrow the money and make the repairs now, instead of postponing the repairs until the money is saved.
Yet, because of what may be perceived as the most important mantra of the city council, i.e. “the city is debt free” and the city should wait until the day that property taxes are no longer paid to Sacramento County, the city’s infrastructure continues to crumble.
Although it is wise to never borrow money to pay for operating expenses, mitigating infrastructure deterioration by making repairs immediately through a special infrastructure tax or borrowing is preferable to deferring repairs.
Citrus Heights residents should not look to the county, the state or the federal government to make the necessary repairs. We residents should solve the problem, instead of hoping that someone else will pay the bill.
David Warren is a Citrus Heights resident and legislative advocate at the State Capitol with Taxpayers for Public Safety. He can be reached at David@forpublicsafety.com.
