03-19-2018, 08:34 PM
(03-19-2018, 07:51 PM)MidTowner Wrote: What is the Region planning as far as the interest cost on the $253,000,000 goes?
Even if it is $200,000,000, that is not in 2018 dollars. The real impact is far more nuanced than 100 characters (or whatever). Not worth replying to him on this, he's probably being disingenuous.
I can’t remember the details, but I believe the monthly payment to GrandLinq includes an interest component which covers the financing costs of the portion financed by GrandLinq. I believe this amount is fixed for 30 years. For the part financed by the Region, they sold bonds, on which they will of course be paying interest until they are paid off.
I don’t know the maturity period on the bonds, but it’s quite common for governments to issue 30 year bonds so I wouldn’t be at all surprised to find the interest rate there is also fixed.
Which if true means that in fact the total of all interest payments is already known.
And in any case those future interest payments are expected to be paid by a larger, more prosperous Region so they actually will have a smaller impact than they would if we paid them now. I mean in theory we could have raised taxes 10% and paid for our entire share over a 5 year period. If I’m reading the Regional budget correctly we fund approximately $500M per year from Regional property taxes. So a 10% increase would give about $50M per year. Voila, 5 years later, $250M collected, entire Regional share paid off.
But you can tell I’m not a politician, because a politician would be smart enough never to even suggest that we “could” raise taxes by 10%, even as a counterfactual. And a 10% increase really would be quite noticeable to many people. But instead we have a much smaller increase and pay the money off gradually as we use the system rather than upfront; just like most homeowners do their house, actually.