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Should city governments loan taxpayer dollars to businesses?

Updated on October 2, 2014

City governments are the caretakers of taxpayer dollars they receive. Being the caretaker has some responsibilities which some city governments have made or are considering making decisions about providing loans to businesses who are interested in their communities. City governments should not be in the business of providing loans to businesses. It is not within their ethical responsibilities to do so and is in my opinion a misuse of taxpayer dollars.

Funds city governments receive should be allocated to providing the services to their citizens that they have a right to expect. This is their main responsibility it is not to provide loans to businesses that may succeed or fail. When businesses fail any loans made to them from stand a chance of never seeing those loans paid back. The fact remains there are many avenues for businesses to receive financing for their business and if they cannot obtain them they should not turn to city governments. If financial institutions will not provide the funding this should send a red flag to any city government to reject such requests.

Tax abatements are a different story in that they are temporary in nature and have an end time. It is not something which impacts money which a city has already received but holds the potential to increase revenue in the future. Tax abatements are done all across this country and citizens seem to not have a problem with such decisions.

As voters we expect our city government to be above reproach and handle the tax dollars they receive in an efficient manner. Elected officials have a responsibility to properly allocate funds to provide for city services and employees have a responsibility to do their job to the best of their ability and be of service to all city residents. Managing tax dollars by city governments in this tight economic situation can be a difficult task to accomplish but residents count on city services to be their when they need them. Loaning money to businesses in somewhat risky endeavors with no guarantee of having the money paid back is a decision any level of government should never undertake must less at a city.

The economy as it is today is tight to say the least and sometimes the funds received by city governments are reduced and as such putting funds at risk is not ethical and is usually at the expense of other city services. Making decisions for pie in the sky projects without knowing where the money will come from are bad decisions. Some projects may be a good idea but they should be put off for future possibilities if money finds its way in the hands of city officials.


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