The rest of the boondoggle
Boondoggle? You know the words "Pulaski County government" are about to follow, don't you?
Remember a fine story by the Arkansas Democrat-Gazette's Mark Minton last year? The county floated a $43 million bond issue, announced in 2002 by County Judge Buddy Villines with great fanfare, to help poor people buy houses. A whopping total of six got houses before the program was shut down, having spent $2.1 million. The only people really helped by this were bond daddies and bond lawyers.
The IRS wasn't happy. This type of program was abused all over the country and investigations were begun.
It's now just about over here. The County Public Facilities Board (which seems to exist in large part to provide tax-exempt bond finance for white-flight private schools) will consider a proposed settlement of the housing bond dispute Monday. You can read it here.
The county gets off fairly easily in the deal negotiated with the IRS. Though the IRS asserts that rules were broken (something the county doesn't admit), the bonds that were sold won't be deemed as taxable for those who received interest before the bonds were called in 2007. The county board will have to pay a $60,000 penalty to the feds. The money will come from bond funds, not from county general revenue. There have, of course, been additional legal fees incurred in working this matter out.
Comments
$2.1 million for low income homes, $2.4 million for the lawyers/consultants. Sounds about right for Americagreed.
Posted by: eLwood![[TypeKey Profile Page]](http://www.arktimes.com/blogs/arkansasblog/nav-commenters.gif)
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June 27, 2008 06:10 PM
So, Patrick Henry Hays gets a periodic blasting because he won't do enough for poor people. And the County gets a periodic smear because they tried too hard to help poor people. Yeah they got scammed, who doesn't. But it looks like they got out with a minimal amount of loss. If it cost them $60,000 but 6 families got a leg up into getting a house, that's okay with me.
Posted by: Sanford![[TypeKey Profile Page]](http://www.arktimes.com/blogs/arkansasblog/nav-commenters.gif)
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June 27, 2008 07:10 PM
It will never stop as long as the taxpayers pay settlements for being scammed in the first place.
Posted by: Eureka Springs, AR![[TypeKey Profile Page]](http://www.arktimes.com/blogs/arkansasblog/nav-commenters.gif)
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June 27, 2008 07:26 PM
"Yeah they got scammed, who doesn't. But it looks like they got out with a minimal amount of loss. If it cost them $60,000 but 6 families got a leg up into getting a house, that's okay with me."
Taxpayers got scammed you mean.
That was just for the penalty to the feds. Who's going to pay the interest on the 42 million and pay back the 2.1 million already spent?
Posted by: Meet John Doe![[TypeKey Profile Page]](http://www.arktimes.com/blogs/arkansasblog/nav-commenters.gif)
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June 27, 2008 07:44 PM
the investors and brokers. Buyer beware
Posted by: Sanford![[TypeKey Profile Page]](http://www.arktimes.com/blogs/arkansasblog/nav-commenters.gif)
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June 27, 2008 10:25 PM
You actually think the County's not going to pay off the bonds?
lol
Posted by: Meet John Doe![[TypeKey Profile Page]](http://www.arktimes.com/blogs/arkansasblog/nav-commenters.gif)
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June 28, 2008 12:23 AM