published Sunday, June 2nd, 2013

Chattanooga organizations fib to snag tax dollars

Contributed Photo
Rendering of Chattanooga History Center
Contributed Photo Rendering of Chattanooga History Center
Photo by Contributed Photo /Chattanooga Times Free Press.

A few weeks back, this editorial page took the Chattanooga History Center to task over its lofty projection that the yet-to-open downtown museum would attract more than 60,000 visitors a year. (The Center's actual estimates range from 65,000 to 75,000 visitors annually.) How, we wondered, could a Chattanooga-centric museum, no matter how well executed, generate that many visitors?

To demonstrate the extent of our doubts about the Center's estimates, this page's editor promised to walk the entire 835-mile length of Trail of Tears (the focus of a planned exhibit in the Chattanooga History Center) if the museum tops 60,000 paid visitors in a year. The catch? Dr. Daryl Black, the center's executive director, would have to walk the Trail of Tears if the center falls short of its attendance estimates.

Black refused to take us up on the bet.

Why would a museum publicize an inflated attendance projection that even its executive director apparently believes it won't meet? To quote the O'Jays, "Money, money, money, money. Money!"

After the proclamation that the museum would draw over 60,000 visitors downtown annually, the Chattanooga City Council gave the Chattanooga History Center more than $530,000 of city taxpayers' money. If the center reaches its attendance projections, great. If not, there's no penalty -- the city won't take back any of the money it shelled out. Taxpayers are out either way.

While $530,000 in public money may seem like a drop in the bucket compared to the center's $10 million construction cost, it is still our money. Further, it raises an important question: Why do we, as taxpayers, allow nonprofits, government agencies and other organizations to inflate and even invent numbers in order to collect tax dollars with no recourse if those numbers are later proven wrong?

Stretching the truth, fudging the numbers and flat-out fibbing in order to receive tax dollars is a way of life in Chattanooga -- and taxpayers are paying the price.

Take The Chattanoogan Hotel, for example. When the city-owned hotel opened in 2001, its supporters in Chattanooga City Hall promised that it would not only pay for itself, but create a revenue stream of dependable extra dollars to fund city services. A dozen years later, we now know nothing could be further from the truth.

While the hotel currently operates on a small profit, it doesn't generate nearly enough money to pay down the massive $47.8 million portion (not even including interest) of a municipal bond that was used to build the colossal facility. The promised revenue stream never came and now taxpayers are stuck paying off the construction cost of the swank hotel.


When the Chattanooga Metropolitan Airport Authority announced it was building a government-owned service and storage facility for private planes to compete against an existing privately owned company, the Airport Authority promised it would become a moneymaker in just a few short months.

The facility cost $10 million in state dollars to build and has already lost more than $1 million in local tax dollars in operational costs since it opened in July 2011. In fact, not only has the government-owned facility harmed the private company, but it requires monthly taxpayer bailouts of tens of thousands of dollars just to stay afloat. So much for the Airport Authority's projections.

The Chattanoogan Hotel and the Chattanooga Metropolitan Airport Authority aren't alone. Managers of the Soldiers and Sailors Memorial Auditorium and the Tivoli Theatre annually make the unbelievable claim that the venues are on the road to economic recovery -- then months pass and the facilities are deeper in the hole. Same thing with municipal golf courses and the city-owned marina. Even the nonprofit agencies the city funds through the United Way rarely provide assistance to as many people as they claim when they submit their funding requests. City leaders know going in that the numbers are likely inflated. Still, money is dispersed and there is never any punishment when the unrealistic promises fall flat.

For too long, organizations and government agencies have taken advantage of taxpayers by providing policymakers with phony facts and fabricated figures to justify receiving tax dollars. Our elected officials owe it to us to hold the outfits who receive tax dollars accountable to prove that their projects meet the anticipated goals. When they don't, lawmakers should work diligently to reclaim as much money as possible and return it to taxpayers.

When we fudge numbers on our taxes, it's fraud. But when organizations and agencies bend the truth in an attempt to collect our hard-earned money from government coffers, it's business as usual. That mindset has to stop.

6
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nucanuck said...

Mr Big Mouth has pretty much accused multiple local organizations of intent to defraud and he has not one scintilla of proof. He won't be sued for libel, but we can surely label him as a thin sham of an editorialist who brings no credit to his position, nor his adopted city.

Building a multi-faceted city takes the efforts of thousands of public and private citizens. Creating public infra-structure is particularly difficult because measuring success is often subjective. Chattanooga has been a national leader in re-developing what was a dismal, dying city. To have this little newby pip-squeak take cheap shots at a city that has excelled is confirmation that the CTFP has made a mistake in hiring.

June 2, 2013 at 1:41 a.m.
charivara said...

Of course, the fact that we have been in the worst economic climate since the 1930's (in large part due to the failed conservative policies of the last 30 years) has no bearing on the current revenue shortfalls of the organizations Johnson mentions.

One could just as easily and more honestly, say: For too long, too many profitable corporations have taken advantage of taxpayers by providing policymakers with phony facts and fabricated figures to justify receiving tax dollars.

Or: When conservatives bend the truth in an attempt to convince the uninformed to hand over their hard earned money to subsidize wealthy individuals and corporations from government coffers, that’s business as usual. That mindset has to stop.

Or: Stretching the truth, fudging the numbers and flat-out fibbing in order to receive (or not pay) tax dollars is a way of life for corporations--and taxpayers are paying the price.

Or: Republicans promised that lower taxes on the very rich and corporations would ensure job creation and a robust economy for all. Yet there was never any punishment when the unrealistic promises fall flat.

But, as someone once remarked, there’s nothing dumber than a poor Republican. Or more manipulative than a rich one.

June 2, 2013 at 1:47 p.m.
gjuster said...

To the posts above - Answer the real question - why does the city go into business to compete directly against private business with the taxpayers money.

June 2, 2013 at 5:40 p.m.
charivara said...

Perhaps if the taxpayers were willing to pay the taxes required to provide the services that people require and government provides it wouldn't have to seek other sources of income.

June 2, 2013 at 8:42 p.m.
Leaf said...

Actually, I'm sure both sides have a point. Money gets wasted. Many projects are boondoggles. In Democratic states rich Democrats get their Democratic politicians to do them favors. In Tennessee, rich Republicans get their Republican politicians to do them favors.

Sometimes projects are good, but they don't pay off right away. Sometimes it's not obvious how or if they pay off monetarily, but they may still benefit the city. Each project needs to be taken on its own merits.

June 3, 2013 at 9:31 a.m.
Salsa said...

"But, as someone once remarked, there’s nothing dumber than a poor Republican. Or more manipulative than a rich one."

And there is no bigger liar than a Democrat.

June 3, 2013 at 10:27 a.m.
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