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Old 02-24-2014, 07:57 AM
 
3,492 posts, read 5,020,304 times
Reputation: 5385

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That article was complete and utter trash.

I was hoping for some serious analysis, but it was absolute trash. Anyone submitting that in my Master's course would receive an incomplete/fail. They may even be instructed to redo the assignment with maximum grade of an F to punish them for their sloppy work.

Need proof?

Look at this section:
****
A group of high-value lake properties petition the city to take over their road. They agree to pay the entire cost to build the road -- a little more than $25,000 per lot -- in exchange for the city agreeing to assume the maintenance. As one city official said, "A free road!"
Strong Towns asked: How much is the repair cost estimated to be after one life cycle and how does that compare to the amount of revenue from these properties over that same period?
The answer: It will cost an estimated $154,000 to fix the road in 25 years, but the city will only collect $79,000 over that period for road repair. To make the numbers balance, an immediate 25% tax increase is necessary along with annual increases of 3% with all of the added revenue going for road maintenance.
***


Do you see the bull in here? The city will only collect 79,000 over 25 years? So rough math 79/25= A little bit over 3. So they estimate that they will collect just over 3 thousand dollars per year for a road across several lakefront properties. Given that many areas tax property at around 2%, that would suggest that the total property value of all lake front properties along the road is a little over 150,000. (150,000 * .02 = 3 for the math impaired)


Clearly, that is absolutely false. So what does that mean? It means the article is using an arbitrary reduction to property taxes to divide them up between several funds. It means the fact that the city decided something like 5% of property taxes are for road repairs has been used to make these calculations unsound. But if they city changed that number to 15%, several of these roads would appear to be "Great investments". However, the arbitrary numbers assigned to the property leave out the real impacts. If these lakefront homes are for couples without children, or vacation properties, then they may be assessing 70% of the property tax as school revenue. In that case, suggesting that the properties should not be serviced, and thus not built, would have been a blow to the school budget.



By viewing the revenues in a total sense and netting all the benefits and costs we can come to a much more intelligent analysis. If we artificially restrict our views to arbitrary numbers produced by a city employee that may be severely lacking in financial training, we are incapable of performing a NPV analysis. Therefore we will come to the wrong conclusion and be providing severely biased data from situations that were already cherry picked.



When any magazine cherry picks the data, declines to state how the numbers were found (such as arbitrary reducers), declines to state where the example occurred (state unmentioned), and declines to provide access to sources for checking their work, you should have several alarms going off that what you are reading is effectively a lie because it has been designed to misrepresent the truth of the situation.



At the moment, I am severely disappointed by the intellectual ability of the many people who read this magazine and blindly accept the conclusions because they want to believe. It shows a severe failing of our school system to properly educate students on math and critical reasoning.
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Old 02-24-2014, 08:21 AM
 
358 posts, read 364,017 times
Reputation: 306
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Originally Posted by Malloric View Post
No. That's not what you said. That's actually completely contradictory to what you said. You said New Jersey was nothing but sprawling suburbs.
I read it as a figure of speech. Like if someone skipped lunch and said "I'm starving!" They are not literally starving.
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