Monday, January 18, 2010

Council member explains vote to constituents given risk-reward analysis of "the last wave of municipal monument building"

Blogging CM Emily Evans (Dist. 23) explains to her constituents why she will be voting against this finance plan for the Music City Center tomorrow night:
Since my primary job is to represent you, I have to use my best judgement and assess this project in terms of its impact on your life and the future of this city. When I apply the most basic risk-reward analysis, the Convention Center proposal does not measure up ....
Without a significant improvement in our tax base, borrowing $650 million will "crowd-out" borrowing for other things. In order to keep debt ratios at the necessary levels and avoid rating downgrades, we will borrow less for other things. Alternatively, we will ignore debt ratios, continue to borrow for those other things, watch our bond rating drop, pay higher interest rates which in turn means we will borrow less. When we borrow less, the basic infrastructure of our city suffers.
That last concern should be familiar to many public school parents. After the last wave of municipal monument building - the Titan's Stadium and Nashville Arena (both of which as a percentage of debt outstanding were much smaller projects than what we are talking about here) - we borrowed less for schools and they fell apart.

The operation of government is about the allocation of scarce resources. If you do one thing that is one other thing that cannot get done.

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