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March
2003 Newsletter
Cost
of Expressway Can't Be Re-couped
In
a February Spectator article, Burlington economist Tom Muir
provided the hard numbers showing that the City can never
re-coup its so-called "investments" in the expressway
and other so-called economic development, and consequently
the residential taxpayer will have to foot the bill.
Allocating "all available resources on economic development"
is the stated number one priority of Council and the main
justification being given for the expressway. Mayor Wade,
Councillor Larry DiIanni, and some other members of City
Council argue that building the expressway will generate
new business taxes by increasing the amount of industrial
and commercial assessment in Hamilton. We are told we must
accept the 'short-term pain' of more debt, more taxes, fewer
services and higher user fees, until the City's "investments"
in economic development (the expressway, the airport, the
business tax reduction plan, etc.) pay off. Mr. Muir's analysis
showed that the payoff will never happen.
The average maximum "payoff" that the City has
been able to achieve over the last 30 years is only about
one percent a year in increased taxes from industrial and
commercial properties. Since the total current taxes from
these properties is only $131 million, a 1% increase is
only $1.3 million. Some of that money has to pay for the
extra costs of servicing the new growth. In the case of
the expressway, even the most rabid supporters of the expressway
admit this will be at least $1.1 million a year. So the
maximum "profit" the City can hope to make is
$200,000 a year. With that it has to pay back $80 million
in debt and $55 million in interest on that debt. Good luck!
Mr. Muir calculates it will take 36 years (and that assumes
that ALL of the new business taxes can be used for this
single project. For example, the City has to pay back over
$50 million in debt incurred for construction of the Linc.
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