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Mayor's stimulus idea is a bad one

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Sunday, Jul 06, 2008 - 12:32:41 am CDT

Timing, appearances, principles, political wisdom, equity and the potential of setting bad precedent all argue against Mayor Chris Beutler’s proposal to subsidize the purchase of vacant, brand-new houses with public money. 

The proposal, Beutler said, will create economic benefits that will ripple through the economy, not only helping put construction workers on the job but also aiding local lending institutions, suppliers of construction material and other related businesses.

It is a flawed idea, no matter how well intended.

Story Photo
Mayor Chris Beutler

The timing is lousy, coming as it does when the mayor is proposing cutting 45 jobs, slashing a half-million dollars from the public bus system and raising the property tax rate.

Yes, homebuilding is in a downturn. But today’s economic distress reaches beyond that important industry.

One must wonder, how much good can be done by awarding $1,000 in public money to 610 lucky new homebuyers? Do the math. A thousand bucks is a small slice of the modern mortgage. And when it comes to the larger picture, hoping to reinvigorate the economy with 610 checks is like trying to empty the ocean with a cup.

Other businesses are hurting, too. Consider, for example, those women and men who sell pickups and full-size sedans. Couldn’t their business use a boost? The government should not grease one wheel at the expense of others.

Darkening clouds on the economic horizon can be scary. And when times grow hard, all sorts of odd ideas bubble up like swamp gas. 

With sympathy to those whose livelihoods are diminished by a local surplus of new houses, it is simply unwise for the city and its citizens to underwrite the mayor’s plan.

We don’t object to the idea of keeping some of the city’s old special-assessment money for one-shot opportunities — public projects with a public purpose — that could score big for the local economy.

This is not one of them.


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Disappointed wrote on July 6, 2008 7:43 am:
" Whatever consciouness of democracy and populism once lived inside Mayor Beutler's heart seems to have fled. Personally I am at a loss. His continual errors in judgement are mystifying. Economic stimulus is good. $1000 checks to subsidize new homes is silly. It doesn't generate jobs, I can't even imagine that it would help sell the houses. What purpose it may have seems to be a mystery. How many more years of this nonsense do we have to go through??? "

 hh wrote on July 6, 2008 8:14 am:
" all other reasons notwithstanding, it's a bad idea, as the builders in Lincoln have been over building for years - let them eat their mistakes! "

 Hank wrote on July 6, 2008 8:28 am:
" If there was ever any doubt remaining, this clearly proves that our city government is run by, and for the sole benefit of, the construction and real estate industries. I suppose that most local governments are in the same shape, they certainly have been everywhere I have lived. I was sort of hoping this wasn't the case here. Oh well, better get used to paying more taxes and higher bus fares so that the city can hand my tax money to the very people whose greed and dishonesty helped to cause the latest financial meltdown. Maybe we should stop voting for these people? "

 year old home wrote on July 6, 2008 8:33 am:
" Mr, Mayor, If you want or need to roll back the impact fees lets have that debate.

This is a not-too-subtle attempt to roll-back impact fees. I am not opposed to growth, but I am opposed to subsidizing someone else's new house when mine needs tens of thousands to pay for "deferred maintenance." "

 Seriously wrote on July 6, 2008 9:16 am:
" I give the guy credit though for trying to think of a creative way to
help. Its tough times for everyone, but we all know what trickle down
effect the homebuilding industry has for our city. There are many folks from plumbers, carpenters, electricians, concrete workers, construction workers and retail establishments who benefit economically ever time a new home is constructed. While the editor mentions helping auto dealerships, the economic impact is not the same. They picked a bad example to use.
o "

 russell wrote on July 6, 2008 10:17 am:
" Building a house is such a short term project that it is unworthy of my tax money. I would rather spend tax money on industry that creates 'living wage' jobs that last years. Those new workers will then be able to upgrade to house buying. The true problem is lack of new 'living wage' jobs. Fix that and many of Lincoln's tax problems will be solved. "

 Confused wrote on July 6, 2008 10:46 am:
" So we give people with ample money an extra thousand bucks, so they can build new homes, and thus create new infrastructures and schools that then the city has to pay to maintain? How about instead we give the thousand bucks to people who choose to buy homes in existing neighborhoods that are having trouble moving homes for sale? Those neighborhoods with infrastructures and schools that are already existing and maintained? "

 Jim wrote on July 6, 2008 11:46 am:
" Only a democrat would propose spending your money to buy up houses. It was a former democrat (Seng) which forced valuations up via property tax increases. We were all rich on paper - per our valuations - only to see the real estate market later fall back to reality. Did your taxes fall too? No. They cause your problems then try to act as if they are the solution. Perhaps we should ask them to leave us alone. "

 Jan wrote on July 6, 2008 1:10 pm:
" I agree that this portion of his budget is a really bad idea. It will do nothing except waste money. "

 Laura wrote on July 6, 2008 3:34 pm:
" This idea is a poor one. I understand trying to think outside the box, but this is clearly just thinking of a way to line the pockets of developers with very, very little real impact on consumers. $610,000 is critically needed elsewhere to enhance or save programs which would more broadly benefit the common good. Please, City Council and Mr. Mayor...let's not throw this money away. "

 Scott wrote on July 6, 2008 5:05 pm:
" Don't we all know already what's going to happen here? The mayor has said we'll have no more one-time short-term fixes -- but the City Council hasn't agreed to that. They'll cannibalize at least some of the surplus funds to cover the budget gap. The mayor will probably veto it, and the council will override. That way they can all point the finger of blame at each other to avoid responsibility. And next year we'll go through the whole mess all over again, ad infinitum. "

 If wrote on July 6, 2008 8:35 pm:
" If 45 positions, possibly more, are on the chopping block, how will this affect the economy? Those positions equate to families. Families needing food, shelter, etc.

If we continue to 'trim the budget,' who will be left to turn out the lights?

If the mayor wants to create economic benefits, lets take care of the 'look' of Lincoln by repairing some of the issues of the infrastructure. That too requires dollars and creates job opportunities. "

 my cents wrote on July 6, 2008 9:12 pm:
" The fact that the city is cutting back 45 jobs has nothing to do with this. I am in the construction industry and do not like the $1K kick back to home buyers. What I would like to see that money go to is tax breaks for new businesses in Lincoln (larger ones). They will bring the employment to the area, the revenue, and that will alone create more home buyers (how many home buyers left with Gallop?). That helps everyone, not just the builders. "

 Shane wrote on July 6, 2008 9:54 pm:
" Jim you are inaccurate on EVERY count:

1) The mayor did NOT force the property tax revaluatons.....STATE LAW DID. Don't take my word look it up. State law requires evaluations to be a minimum of 90% of sale value

2) Lincoln did NOT take adantage of the revalutions by keeping the mill levy the same but LOWERED the mill so that additional money was NOT taken in. IF the city had wanted to soak the public they could have kept the mill levy at .43 instead of lowering it to .28

IF you have taxes that are too high it is NOT the 14 cents the City takes out of every tax dollar. While I think you are right that the housing rebate is a bad idea, you are clearly blaming the wrong entities "

 whatever wrote on July 6, 2008 10:25 pm:
" I'll cut Beutler a "little slack" for promoting this as I "get" what he is trying to do. But it is MUCH to little to late and a complete waste of money. And it ISN'T the role of government to provide this incentive in spite of the agricultural and global business incentives our state and nation provides for BIG BUSINESS. It's almost laughable as if this concerned BIG BUSINESS the incentives would be much bigger. "

 Instead of wrote on July 6, 2008 10:29 pm:
" cutting the police dept. and fire dept. why not use this money to keep them and add more police? Let the mayor and council get robbed a few times maybe they would think differently about protecting the citizens of Lincoln. The police can't keep up now with all that goes on. Logic, obviously is not a requisite to being a city official. requite, doesn't exist in our city government. "

 islander wrote on July 6, 2008 11:05 pm:
" oh my my my grand island and lincoln are in bad hands right now. hornady is ruining the city of gi and beutler is ruining the city of lincoln. "

 Older guy wrote on July 7, 2008 12:54 am:
" My Beuttler if you have a few thousand lying around in your accounts maybe you would like to pony up the $1000 plus for some of these people. Some of these people may have more than one home to pay for so you wouldn't have to contact so many people. Is there something in your job description that says you should make sure all the money we can tax needs to be spent to help the people who need a newly built home? Does the tax payer have any reason to think this is a good deal for each tax payer? Spend your own, leave the tax paid funds alone, find another hobby, retire, fire your extra help you created a job for. He and you fed at the public trough for long enough. Reduce the taxes if you want to help the city budget. Taxes kill the industry. Guess you haven't thought about that. Industry permits profit. Profit means hiring, Hiring means income. Income pays more taxes than taxed away industry. It is a viscous circle that means we progress instead of regress. Only if you don't get your grubby fingers on the legitimate tax moneys can it really work. Recommend a hard slap to the fingers on the ends of your arms. "

 dewboy wrote on July 7, 2008 1:38 am:
" Sounds to me like the mayor is after campaign contributions. The builders and or contractors created their own mess so lets let them swim in it. They really had the fat prior to impact fees when they were living off of tax payers expenses but now since they have to pay at least something they really cry about it. Take a close look at some of the garbage they are building. "

 Tired of Whining wrote on July 7, 2008 7:43 am:
" While I am in complete agreement that something clearly needs to be done here, at least the mayor is doing more than sitting at his computer over a cup of coffee every morning and complaining about what a bad job everyone else is doing. At least the mayor is trying to come up with ideas, even if they aren't the best. What are all of the finger pointers and whiners doing? Are you emailing your city council? Are you emailing your mayor with ideas? Are you putting pressure on your elected represntatives so they might decide to vote the way you want them to? Or are you just sitting back and waiting for someone else to take care of the problem yet again? And people wonder why children now days can't seem to take care of anything on their own and can't even be bothered to have a skinned knee from their own bad decisions on a playground with a little gravel on it. Its about time the adults in this town stopped acting like the romans and simply content to grow fat and lazy, arguing politics and watching games, while the city burns around them. "

 sa wrote on July 7, 2008 8:37 am:
" You have missed the point. New homes pay ongoing taxes forever. This is a government revenue generator. That is how he looks at it. This has little to do with helping new builders or the industry, but keeping money coming into the local government. "

 rac wrote on July 7, 2008 12:43 pm:
" I agree with "sa". I think the biggest problem with this "incentive" is that probably very little of it will incentivise anyone to build a brand new home. I would submit to you that if $1K is enough to tip someone towards building a new home that was previously on the fence about it, then they probably can't afford to build a new home. "

 To tired of Whining wrote on July 7, 2008 12:50 pm:
" yeah maybe he is coming up with ideas but they are terrible ones! If this is how mayor thinks then God help us. What are you doing about it? First Seng now Chris. I am a demo and I will be voting for a republican next round because I am sick of people who have no idea about budgets. Why do people vote for people like this? Does anyone do homework on who they vote for? This is the worse idea I have ever heard of and will not accomplish anything but make home builders have more money in their pockets. Thanks Chris! And to " "

 Jeffy wrote on July 7, 2008 3:47 pm:
" Step 1: Steal underpants.
Step 2: .....
Step 3. Profit! "

 tim wrote on July 7, 2008 3:47 pm:
" why is housing down again. simple. impact taxes. if i build 3 miles outside the city limits i can save $5000.00 even at $3.50 thats a lot of gas. "

 Shane wrote on July 7, 2008 6:17 pm:
" IF the impact fees are the problem then how come housing starts are off almost the exact same percentage in the county as they are in the city. Let's talk about financing (NOT A CITY ISSUE) a glut of houses (CREATED BY THE BUILDERS) and the fact that older neighborhoods were paying for infrastructure in housing developments while the infrastructure in their neighborhood was falling apart. Omaha has impact fees they just call it something else so quit trying to freeload into having someone else foot the bill "

 Tired of Whining wrote on July 8, 2008 6:58 am:
" What am I doing, you ask? Here is where I email the mayor's office from: http://www.lincoln.ne.gov/city/mayor/tele.htm#may
Here is where I find my city council reps. email: http://www.lincoln.ne.gov/city/council/lista.htm
So I ask you again, what are you going to do? Share your ideas and use a representative style of government or sit over your coffee cup and simply complain? "

 the wrote on July 9, 2008 4:27 pm:
" best stimulus would be to reduce property taxes to about 1/3 of what they are. That would bring more people into the town. People I talk to are planning a leaving in the next 5 years for greener pastures in other states where they can live on a fixed income. You just can't retire in lincoln due to the high cost of taxes,period. I figured that with my home paid for it would cost about 150% of my old house payment to pay taxes and insurance for it. My house being paid for would cost about 450 a month to insure and tax. You can't retire with that kind of bill every month. I don't know how people there do it and drive a new car. "

 Tod wrote on July 12, 2008 5:15 pm:
" I don't think anyone said property evaluations were forced. But, I and many others do believe they were done in a time of downturn in prices, and, valuations miraculously went up. If my house is valued at 90% of sales price, I'll eat my hat. It wasn't three years ago, and it isn't today. When I protested, showing how comparable houses in my area sold for less than my valuation, I got a judgement of "no change". They sure were quick to raise the valuation in a hot market that was obviously a bubble, but the burst hasn't lowered it an iota. "

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