I’m getting to be a little appalled by the aggressive campaign the Natural Science Center is waging in an attempt to get people to come out and vote for the $20 million NSC bond issue. I guess they think this is likely to be a low turnout year and are hoping to drive people to the polls where, once they see that warm, fuzzy NSC bond on the issue will vote “yes”. Just like with school and park bonds.
Before you push that blinking button though, remember this, BOND = TAX. A bond is simply a way of borrowing money. Where does the money come from to pay back the bond? The citizens. Do you think the City is going to cut other spending to pay for this bond? No, they will do the exact same thing they have done over and over again which is to raise taxes, while telling the voters that they voted to raise taxes when they passed the bond.
As I mentioned, I love the Natural Science Center. I’m a member, my kids take classes there and we go there all the time. The worthiness of the project is not the issue here. In fact, since it is so worthy, the NSC should be able to raise money from other sources. It is convenient for them to borrow money through a city bond instead of borrowing it on their own because government bonds (good ol’ munis) are issued at a lower interest rate than the NSC could get on its own.
“Why is that?” you ask? Well, because the city can raise taxes to generate income from its residents, something the NSC cannot do. The NSC would only be able to pay back the bond with money from ticket sales, memberships, fundraisers, etc. Those are voluntary to the people who pay them, unlike a tax and so the city, since it can guarantee people will pay its increased taxes, would get a lower rate.