Answers: tax increase

By Gus Bode

Dear Editor:

I would like to add to Walter D. Wallis’ excellent letter in the Tuesday edition about the Carbondale sales tax increase that will yield $20 million toward the cost of a

new football stadium.

Advertisement

The very worst thing about the 4-3 vote by the mayor and City Council is that there are no specifics for the stadium itself or the mechanics about how it will be funded.

Will SIUC float the bonds for the stadium? What will be the issue price for the

bonds, when will they be retired and at what interest rate – fixed or floating – will they be offered?

How will the city make its annual $1 million contribution? As a direct gift to

the SIU Foundation or as a purchase and then retiring of a portion of the bonds?

What if the bonds’ interest rate increases down the road? What if the bonds have

to be reissued (an enterprising reporter should check into just how many decades it took the University to pay off some of its high-rise dorms)?

Advertisement

What will happen if the expected yield from the higher sales tax doesn’t equal

the $2.3 million a year projected by the city? Will the city make up the shortfall by cutting back on the $1 million toward the stadium, or will it cut other projects it has promised the public?

Suppose within four years the city has a new mayor and all new Council members

who believe this $20 million pledge in 2007 was a lousy idea passed by bone-headed officials. Will they be able to get the city out of its 20-year commitment?

And suppose that all those wealthy alumni, stacked like cordwood on the sidelines, ready to give their all to funding the other $40 million needed for the stadium, don’t in fact come through? What if there is not enough money to build the new stadium by year 2010 and the project has to wait until year 2020? What will have happened to those $1 million annual city payments in the meantime?

Are there any safeguards to ensure that the city isn’t in fact buying a pig in a

poke? Are there any contingencies for the money if in fact the stadium’s construction is delayed?

Finally, does the new 7.75 percent sales tax rate effectively mean that the city

is now at the absolute maximum it can charge, and, if so, how will it raise funds for capital and infrastructure needs that might occur at year 10 or 15 in this 20-year span?

Laraine Wright

Carbondale IL

Advertisement