Tuesday, September 25, 2007

The budget, in theory...

I have kind of sat on the city budget issue, not posting on it yet, only a few snarky comments here and there. I guess it would be interesting to see the budget in person, to go downtown and request a copy or get a PDF of it. I don’t know if such a PDF exists. It must have been printed from something. It may have already shown up on the city website, but the previous year’s budgets on the city website look like abridged versions. None of them have five year plans, which again would be interesting to see, although apparently I’m not supposed to. Well, even if I could read it I probably wouldn't understand it.

So based on my current limited information, I really have only two thoughts. First is that we ignore the under-funded pensions at our peril. If we think that acting surprised is somehow going to motivate the state to help us out, well, I just don’t see that dawg huntin’. Also, the notion that pooling with cities around the state will work seems a great stretch. Cities will fully funded pension funds have no incentive to pool, and pooling with other cities that have under-funded funds makes no particular sense. Maybe I just don't understand what's in that plan. Considring I try to keep up with news, that indicates a problem with communicating the plan.

My second thought concerns what the Mayor noted himself: Paying for capital projects through revenues is apparently quite unprecedented, here, around the state, around the whole frickin’ country. Why? Frankly, I don’t know myself, but I can speculate a couple of reasons. One is that capital projects can be quite large, especially if they are to be done right. You could paint your house on the cheap, painting a wall here one month, a wall there one month. But that would be a pain, it increases the chances it won’t be done right, etc. Similarly doing city projects like street resurfacing on the cheap increases the chances they can’t all be done and they won’t be done right. Bascially, we have no safety net too if we spend the whole capital budget and then have a flood or a fire. We can borrow in that situation, but how quickly? Capital projects are supposed to improve the infrastructure such that the quality of life or the ability to do business is improved, more people or businesses move in and the tax base increases. That’s another reason why the projects are often financed by debt. Now, you don’t want to take on debt to meet payrolls or pensions, and cities don’t. But for buildings, equipment, roads and bridges, it makes some sense to finance through debt.

The Mayor’s own statements on being unprecedented worry me. The city’s finances are too shaky to do unprecedented things. And his lack of statements on pensions worry’s me. The fact that some on Council now oppose letting the parking tax fall to 40% worries me, in terms of what the Act 47/ICA people, and the State legislature behind them, might do. And it annoys me that council won’t get the budget until after the election.

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