The real beneficiaries of Mayor-President Kip Holden’s tax plan remain to be seen. The Mayor is working hard on a public relations campaign showcasing his proposed $887 million municipal 30-year bond issue. Holden is hopeful that voters of EBR Parish will say yes to a half-cent sales tax and 9.9 mill property tax the second time around.
Muncipal bond issues afford governmental entities the opportunity to borrow money at lower rates. The bonds are paid back through the collection of taxes. What is rarely discussed is the fact that municipal bond issues are huge money makers for the ‘chosen ones’ allowed to participate.
In politics, they say follow the money. Who makes money on the issuance of muncipal bonds?
- Public Relations consultants – designing a plan of action to market the bond issue
- Counsel – bond attorney serving as legal representation, providing legal opinions, preparation of documents, handling regulation and compliance issues
- Investment banker – underwriter of the bond issue that buys, markets, resells bonds
- Financial advisors – design structure of bond issues, prepare disclosure statements, solicits bids from underwriters
- Trustee – paying agent representing the bondholders (i.e. bank)
- Insurance company – guarantor of bond issue/credit enhancement
If the tax/bond issue passes, it will be interesting to see who is awarded these various components. Each entity will be paid significant fees.
These details are not part of the ‘public relations’ program currently being used to sell taxpayers. Does it matter? What if they have to pay to play?
We are hearing a lot in the media about state government ethics in regard to those tied financially to the Governor’s office via political contributions. The question is should those making political contributions be allowed to benefit by receiving contracts, positions, etc?
Why isn’t anyone asking these questions about Holden’s bond issue?
Municipal bond issues are also marketed to the public under the guise of creating jobs and generating income to local businesses. Companies will be required to bid. Few taxpayers, if any, will take note of the businesses participating in each project.
Seldom does anyone have the time or information to research these tidbits of information. Who has the time? Even more important, who has the knowledge? We already know The Advocate won’t be revealing these facts to us:
- How much are consultants being paid to handle the public relations of Holden’s bond issue? Walter Monsour is already on board as a consultant. Who else? What is this costing us?
- Who is the bond attorney/counsel?
- What are the relationships of all of these entities to Holden?
- How much did they donate to Holden’s political campaign?
- What contributions have been made to other elected officials such as Sheriff Gautreaux by these individuals and companies?
- Who are the proposed financial advisors, bankers, trustees?
- Were or will these contracts bid out?
- Who will share in contracts to build a $135 million prison?
- Who will move the dirt? Hook up the electricity? Provide the security system? The list is endless. The answers are key.
- The same for a $44 million juvenile service facility, a $92 million public safety complex, $19 million for fire stations/EMS, $38 million for city hall remodeling?
- There are more projects including the largest of all for $255 million for a tourist attraction downtown.
The grand total for Holden’s tax plan/bond issue is $887,504,330. In the plan shared with the taxpayers, as you can see, there is NO mention of bidding, percentages or fees to be paid.
Let’s recap. You are being asked to take on a 30-year loan in the amount of $887 million without all of the fee and contract details. Are you willing to be a party to signing a note of that magnitude without the fine print?
Maybe they hope you are willing to blindly say yes?
This is government spending and politics as usual, once again, in its truest form. It really isn’t really important. It’s just your tax dollars.
Or is it important to you?
Until next time,
Red Stick Republican