Comments on: County to Push Back Vote on Bond Proposal

By: Herb

Herb — Fri, 12 Jul 2013 11:22:47 +0000

A local group is seeking volunteers for a petition drive to force a vote on this issue, their web site can be found by Googling “Washtenaw Watchdog”.

By: Timothy Durham

Timothy Durham — Tue, 09 Jul 2013 14:36:58 +0000

Steve Bean:
“(I’m doubting that they would invest locally in food production and energy efficiency, for example, which could have positive financial as well as social returns.)”

What would be your plan to get this going, Steve? How would they address the issues meant to be dealt with by issuing bonds? Or are you saying this should be done instead of taking care of those obligations?

By: Joe Z

Joe Z — Mon, 08 Jul 2013 19:47:11 +0000

And the bond market is folding: [link]

By: Eric J

Eric J — Sun, 07 Jul 2013 13:05:43 +0000

The beginning of wisdom is the fear of a tax payer revolt over this horrible bonding proposal. The next step is to realize that the problem is not how to fund the county’s absurdly over generous pension and medical benefits but how to get out of them. Call up the unions, tell them we need revisions to fit in with the resources that are currently available, otherwise see what you end up with, if anything, after Chapter 9.

By: Steve Bean

Steve Bean — Thu, 04 Jul 2013 02:31:48 +0000

“At the board’s May 2, 2013 working session to discuss the proposal, Axe told commissioners: ‘If you don’t issue the bonds, you’re going to have horrible budget problems.’”

I believe he’s right. And if we do issue the bonds, those budget problems will be even worse.

By: Steve Bean

Steve Bean — Thu, 04 Jul 2013 02:18:33 +0000

Deflation has been underway for a couple of years now, at least since the tops for gold and silver in 2011, and is finally spreading from commodities to stocks and bonds. The May 22 highs in the S&P and DJIA stock indexes continue to look like the end of the ‘b’ wave top. The next week will tell if that’s the case for certain. A steep wave 3 drop will confirm the tops; a much-less-likely (based on an array of other indicators) rise above the June 18 highs would point to another wave up to complete the ‘b’ wave.

In either case, the deflationary spiral to come will be extremely challenging for the county, particularly with regard to this liability. Bonding is the worst of the options available since returns will be almost impossible to come by. (I’m doubting that they would invest locally in food production and energy efficiency, for example, which could have positive financial as well as social returns.) Increased debt would only exacerbate the necessary service cuts later.

A millage is a better choice, but it wouldn’t guarantee that the county won’t eventually default on some obligation at some point. Property values will decline (deflate) along with all other financial assets, leading to lower tax revenues. The follow-on economic impacts will lead to higher unemployment, more foreclosures, and subsequently lower revenues for the county.

While more cuts aren’t appealing, making the effort now would start the necessary transition to depression-level government and community cohesion that will ultimately be necessary. While there won’t really be a bright side financially, labor and material (and probably even energy) costs will drop along with other prices—small consolation.

Thanks to those taking this decision very cautiously.