Monday, February 9, 2009

The Closer You Look, The Worse It Gets

In mulling a response to the character attack lobbed at the Opt4Better activists launched by the Friends of Davenport Promise (Saturday, Quad City Times story), I took another look at the "inconsequential details" in the Upjohn Report. (I now realize that I may have spent more time reviewing that report than the task force did!)

In looking at the "benefits" to the City of Davenport, I realized the property tax revenue projected was a "gross " number. It did not take into account the ongoing expense related to providing city services to these new residents who buy new homes to take advantage of the Promise program.

These new residents surely are going to want police and fire protection. They will need their neighborhood streets maintained, and probably will expect a higher level of snow removal that what the rest of us have gotten use to. With more use, our major traffic arteries will also get more use, and require more maintenance. Our wonderful park systems and heavily used trails will surely get more action.

There are probably a dozen or more city services I am missing. The point is, that new development the Promise program will generate has some expense tied to it. Sure, it is money we didn't have before. But to call all of the revenue a benefit, without recognizing the expenses it also creates is a poor management practice.

These same expenses, and probably more, are attached to the commercial growth that The Promise promoters tout. To cover just the 10th year’s projected "shortfall" will require $140,000,000 in NEW commercially assessed property (the equivalent of adding 2½ NorthPark Malls) be added to the tax roles. This type of intense commercial development clearly creates additional expenses for the city.

I can hear the "naysayer against progress" comment again. No way should this be construed to be against growth. It just acknowledges that with growth comes increased demand for services that need to be recognized. Growth should pay for itself, and not result in an increased burden for all taxpayers.

Of course, not recognizing the costs associate with the benefit is just another oversight in the Upjohn Analysis. Like the other problems (inflation rate low, timing of tax payments, overestimate of benefits), it further acerbates the long term "shortfalls" related to the Promise Program. Of course, the Promise supporters consider these to be just "inconsequential details."
The closer I look, the more clear this isn’t about shifting 40% of a penny sales tax for economic development, it is saddling the taxpayers of Davenport with an entitlement program that will spend $40,000,000 in the first 10 years, and grow more expensive in the next 10.


  1. I haven't read anything about what happens if the student doesn't follow through with their promise to live in Davenport. What happens if they just decide to live somewhere else? Do they have to pay the money back? What happens if they take a couple years worth of money but don't graduate? Do they pay the money back? And is this some kind of forgivable loan or just free money?

  2. There is no obligation for the student to come back and work in Davenport, nor does this program actually help create a job for them once they graduate anyways.

    There is no obligation to pay the money back in any sense, regardless if they graduate or not, come back to Davenport or not. It is free money and not a loan that must be paid back. It is an entitlement program that can easily exceed the $4.5 Million allocated for it. Once the $4.5 million threashhold is reached the city will then have to seriously consider one of two options. Either cut the amount promised down as time goes on or increase funding for the program by raising taxes somewhere or cutting expenses from much needed roads and sewer projects and maintenance.

    Needless to say, those that are promising this free money have not seriously looked at a plan B for when the Threashhold has been reached. It sounds great in theory, but in practice will spell disaster for the City of Davenport and it's taxpayers.

    But hey it's all in the name of Progress and after all these guys boast about dreaming big things for Davenport, while they ignore the real unintended consquences. I guess they feel that will be someone else's problem down the road. As long as we're doing something, right.

  3. The kids will be able to get better jobs when there older since they went to collage!

  4. Katie, a college education is no indicator of a person's employability.

    I also assume you mean "when they're older" and "college".