Wendell town commissioners are treading on largely un-tilled soil as they consider taking out loans to address a bevy of needs in town, from street paving to police car purchases.
But it is the right thing to do. The town has a host of needs which significantly outstrip the town’s ability to pay in cash. Many of those needs are the result of impending growth that is expected to come with the development of Wendell Falls. But since the homes in Wendell Falls are not yet built, the town is not collecting property taxes to pay for those needs.
The town could wait until Wendell Falls is completed to begin paying for some of the improvements that are needed, but most Wendell folks will be hooting and hollering long before then about slow police response times or giant potholes in streets.
Borrowing money isn’t inherently bad. Few of us can put cash on the barrel head to pay for a car outright. Even fewer can buy a home without taking out a mortgage loan. A borrower needs to be able to show that he or she has the wherewithal to pay that money back over time and in a town’s case, it can almost always show that ability because it can raise taxes and generate more income.
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But in Wendell’s case, that may not even be necessary. The town currently has very little debt and some of that is expected to be paid off soon. The town plans to use the money it currently spends on debt payments to begin paying off the new debt. In other words, there would be no real change in the town’s payment schedule. The money would simply go to a different loaner.
We realize – and we’re sure commissioners do, too – that there are no guarantees. Some unexpected expense could come along that requires the town to spend money it had not planned to. And that might necessitate the need to raise taxes. But never acting on these other needs because something else might come along is sort of like waiting until you can afford it to have a baby. If we all did that, there’d be virtually no children.
The bottom line is the town’s current tax base – the homes and buildings and land that are taxed – isn’t worth enough money to generate sufficent tax revenue to pay for some basic needs. Town leaders hope that will change as the economy improves and growth takes place. But the needs keep coming. A loan helps meet those needs. And because the town has been fiscally prudent in the past, Wendell can afford to borrow what it needs now.