5 ms·

Strongtowns is literal misinformation. The story about infrastructure costs killing municipalities is entirely false, and can be seen as such with only bare min

by xyzzyz 4y ago

Strongtowns is literal misinformation. The story about infrastructure costs killing municipalities is entirely false, and can be seen as such with only bare minimum of research. Infrastructure costs are typically around 10% of the budget of municipalities, and almost universally are under 20%. Look up your own city or town, and report back if you find otherwise.

dsr_ 4y ago
all numbers rounded. I live in a city near Boston. total budget: 300MM school budget: 100MM attributable to maintenance/keeping things running, including debt service: 92MM fire and police: about 20MM each.
- xyzzyz 4y ago
  Interesting, which city is that?
catawbasam 4y ago
Also add: - debt service related to infrastructure - higher transportation related costs, eg for school buses, fire fighting, parking related building costs But I agree Strongtown arguments tend to ignore other big cost categories.
throw0101a 4y ago
> Infrastructure costs are typically around 10% of the budget of municipalities, and almost universally are under 20%. Today's infrastructure/capital spending is tomorrow's operating spending: * https://www.dearwinnipeg.com/2020/02/24/accounting-101-for-councillors-mayors-and-free-press-columnists/ https://www.dearwinnipeg.com/2020/02/24/accounting-101-for-c... * https://www.strongtowns.org/journal/2021/11/8/holy-leaping-dollars-batman https://www.strongtowns.org/journal/2021/11/8/holy-leaping-d... If you don't believe this talk your local CPA.
- xyzzyz 4y ago
  It shouldn’t then be hard to point out to an old suburb, for which tomorrow already came. Where are they?
  - throw0101a 4y ago
    See another comment of mine: * https://news.ycombinator.com/item?id=31548507 https://news.ycombinator.com/item?id=31548507 See also case studies on the net revenue and 'municipal ROI' of low- versus high-density development: * https://news.ycombinator.com/item?id=31549334 https://news.ycombinator.com/item?id=31549334
enragedcacti 4y ago
Yes, when the political organization that would look bad if it bankrupted itself chooses how to do their accounting, they choose methods that make it look like they aren't bankrupt. https://www.strongtowns.org/journal/2015/12/7/the-lies-we-accrue https://www.strongtowns.org/journal/2015/12/7/the-lies-we-ac... > It may be easiest to think in terms of personal finance. Imagine you purchase a car for $20,000 in 2015, but under a special promotion no payments are due on your bill until 2018. In what year did you incur the $20,000 bill? Most people would say 2015, the year you acquired the car. That’s the answer mandated under accrual accounting, a method of financial reporting required of all public companies by the Financial Accounting Standards Board. But many state and city legislatures disagree. They operate with the conviction that a bill is not incurred until the money leaves your bank account to pay it. So if you choose not to pay the bill for your car until 2018, for accounting purposes the bill will only appear that year. https://www.strongtowns.org/journal/2014/8/19/is-a-street-an-asset.html https://www.strongtowns.org/journal/2014/8/19/is-a-street-an... > Current accounting practices do not bear any relation to the future cash flow or the actual financial health of the city. When cities take on obligations, they should be properly accounted for as liabilities, not assets. When the city uses debt to build new infrastructure, it is taking on the double liability of both the current debts payments and the future maintenance obligation. The tax base associated with these obligations needs to also be accounted for as a cash asset (think of it like an annuity) discounted over the useful life of the infrastructure. Then we would have an accurate account of the obligations (liabilities) of the community and how that compared to the tax base (assets) that needed to support them. In short, a true account.
- xyzzyz 4y ago
  There are plenty of suburban towns exhibiting exactly the same allegedly fiscally disastrous pattern of development, that are 50+ years old, and so the infrastructure debt should already catch up to them. Where are they? Strongtowns tells very plausibly sounding stories, but is short of actual examples. Where are all the places getting bankrupt by infrastructure costs? Or is it always “half a century from now, the costs will totally catch up with you”?
  - enragedcacti 4y ago
the_only_law 4y ago
> Infrastructure costs are typically around 10% of the budget of municipalities, and almost universally are under 20%. Look up your own city or town, and report back if you find otherwise. Give the crater sized potholes I used to see when I lived there , I’d believe even less for cities in SCl.

by xyzzyz 4y ago

dsr_ 4y ago

all numbers rounded. I live in a city near Boston. total budget: 300MM school budget: 100MM attributable to maintenance/keeping things running, including debt service: 92MM fire and police: about 20MM each.

xyzzyz 4y ago
Interesting, which city is that?

catawbasam 4y ago

Also add: - debt service related to infrastructure - higher transportation related costs, eg for school buses, fire fighting, parking related building costs But I agree Strongtown arguments tend to ignore other big cost categories.

throw0101a 4y ago

> Infrastructure costs are typically around 10% of the budget of municipalities, and almost universally are under 20%. Today's infrastructure/capital spending is tomorrow's operating spending: * https://www.dearwinnipeg.com/2020/02/24/accounting-101-for-councillors-mayors-and-free-press-columnists/ https://www.dearwinnipeg.com/2020/02/24/accounting-101-for-c... * https://www.strongtowns.org/journal/2021/11/8/holy-leaping-dollars-batman https://www.strongtowns.org/journal/2021/11/8/holy-leaping-d... If you don't believe this talk your local CPA.

xyzzyz 4y ago
It shouldn’t then be hard to point out to an old suburb, for which tomorrow already came. Where are they?
- throw0101a 4y ago
  See another comment of mine: * https://news.ycombinator.com/item?id=31548507 https://news.ycombinator.com/item?id=31548507 See also case studies on the net revenue and 'municipal ROI' of low- versus high-density development: * https://news.ycombinator.com/item?id=31549334 https://news.ycombinator.com/item?id=31549334

enragedcacti 4y ago

Yes, when the political organization that would look bad if it bankrupted itself chooses how to do their accounting, they choose methods that make it look like they aren't bankrupt. https://www.strongtowns.org/journal/2015/12/7/the-lies-we-accrue https://www.strongtowns.org/journal/2015/12/7/the-lies-we-ac... > It may be easiest to think in terms of personal finance. Imagine you purchase a car for $20,000 in 2015, but under a special promotion no payments are due on your bill until 2018. In what year did you incur the $20,000 bill? Most people would say 2015, the year you acquired the car. That’s the answer mandated under accrual accounting, a method of financial reporting required of all public companies by the Financial Accounting Standards Board. But many state and city legislatures disagree. They operate with the conviction that a bill is not incurred until the money leaves your bank account to pay it. So if you choose not to pay the bill for your car until 2018, for accounting purposes the bill will only appear that year. https://www.strongtowns.org/journal/2014/8/19/is-a-street-an-asset.html https://www.strongtowns.org/journal/2014/8/19/is-a-street-an... > Current accounting practices do not bear any relation to the future cash flow or the actual financial health of the city. When cities take on obligations, they should be properly accounted for as liabilities, not assets. When the city uses debt to build new infrastructure, it is taking on the double liability of both the current debts payments and the future maintenance obligation. The tax base associated with these obligations needs to also be accounted for as a cash asset (think of it like an annuity) discounted over the useful life of the infrastructure. Then we would have an accurate account of the obligations (liabilities) of the community and how that compared to the tax base (assets) that needed to support them. In short, a true account.

xyzzyz 4y ago
There are plenty of suburban towns exhibiting exactly the same allegedly fiscally disastrous pattern of development, that are 50+ years old, and so the infrastructure debt should already catch up to them. Where are they? Strongtowns tells very plausibly sounding stories, but is short of actual examples. Where are all the places getting bankrupt by infrastructure costs? Or is it always “half a century from now, the costs will totally catch up with you”?
- enragedcacti 4y ago

the_only_law 4y ago

> Infrastructure costs are typically around 10% of the budget of municipalities, and almost universally are under 20%. Look up your own city or town, and report back if you find otherwise. Give the crater sized potholes I used to see when I lived there , I’d believe even less for cities in SCl.