Truth in Whirled headlines

It was refreshing to see the Whirled publish (on Tuesday, August 19) an editorial with a headline warning the reader that the text beneath was misleading and full of distortions. There it was, bold as brass at the beginning of the editorial column: "Not so." And indeed, most of what followed was not so.

Perhaps truth in headlining will become standard practice at the Whirled: "Has-been humorist" would appear next to Jay Cronley's photo.

The Whirled was accusing former County Assessor Jack Gordon of making "claims that should not go unchallenged." But the Whirled doesn't challenge his facts at all. They make counterclaims without providing any substantiation, and in one case they affirm what he said, but do so in a way that looks like contradiction.

Here's their first challenge:

For example, he criticized the size of the $885 million package, claiming it will "cost us $200 million in interest alone." In fact, officials estimate that a likely interest cost for advance-funding projects is about 5 percent -- or something in the neighborhood of $50 million. What's more, there's a good chance of earning investment income in that same neighborhood, which means debt service and in terest earnings might be a wash.

The Whirled offers no substantiation beyond "officials estimate". Jack Gordon's estimate is based on a 3.75% interest rate and the fact that the bulk of the projects will be funded within the first year -- Boeing, American, the arena, the higher ed projects, and several projects in prop 4. So we'll be borrowing over $700 million right away and paying it back over the next 13 years. We'll borrow the remaining $175 million within the first three years -- they won't make the suburbs wait for their shares, will they?

I tried this myself with these assumptions -- $700 million initial principal, another $100 million after year one, another $50 million after year two, and the remaining $35 million after year three. Payments starting at $38.5 million semi-annually (based on current tax revenues, and growing at a 3% annual rate -- yielding $1.2 billion in revenues over 13 years), with 3.75% annual interest assessed semi-annually. And of course, I take into account Boeing's annual $12.5 million repayment beginning at the end of year 11. I come up with $217 million in interest. And I'm assuming the trust will only spend the $885 million on their list -- if they spend more, the interest will be more. If others have different estimates, let's see their assumptions.

And how does the Whirled propose we earn investment income when we're going into debt right off the bat and won't get the debt repaid until year 12?

Item two:

Gordon also claimed that "it's already been shown that there will be at least $150 million left over" for a public trust to spend. In fact, city and county officials have said the option exists for elected officials to call a halt to the new penny sales tax when funding for all projects and costs has been obtained. No one can say at this point if any surplus will ever be generated.

The Tulsa Whirled's own story on July 23rd had this to say:

Assuming no growth in sales, a 1-cent increase in the county sales tax would raise about $1,014,180,000 over its 13-year life, based on county receipts from the fiscal 2003, which ended June 30.

A 13-year, 1-cent sales tax increase would raise about $1,069,191,000, based on fiscal 2002 county sales figures.

That first, lower number is $129,180,000 above the $885,000,000 designated for projects. The second number, which still assumes no growth in sales, but uses a different baseline, is $184,191,000 above the designated project amount.

The fact that officials have the option to call a halt to the tax is not reassuring. Taxes only go away when they are required to -- as the Whirlpool tax did, when the designated dollar amount was raised. If they were committed to terminating the tax when the money was raised, they could have written a limit into the tax. But they chose not to do so. The only limit is 13 years.

Here's their third slap. They state exactly what Jack Gordon has been saying, but make it sound like they are contradicting him.

The former assessor declares that there is no guarantee that construction jobs will be given to local or state companies. In fact, resolutions call for local vendor preference when possible in accordance with state law. But as Gordon should know, state and local laws require competitive bidding and contractor selection based on the lowest and best bid.

The last sentence is precisely the point: State laws require the county to select the lowest and best bid. Counties can only do what state law explicitly authorizes them to do. They do not have the discretion to give bonus points to local businesses. Local businesses might win the bid, but they have no special advantage, and there is no guarantee that a local business will be selected. It's disingenuous to point to the line in the resolution ("to the extent permitted by law") because the extent permitted by law is not at all.

The Whirled closes by expressing confidence in the common sense of Tulsa's voters:

Let's hope voters, who have shown remarkable common sense over the years, can distinguish the public figures spouting the half-truths from those trying to tell voters what they really want to know and should know. Our bet is they can tell the difference.

The "vote no" team is betting that the voters' common sense will prevail on September 9th, just as it did in 1997 and 2000, when voters saw through expensive marketing campaigns to reject sales taxes for sports arenas.