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Tuesday, October 21, 2008

Mayor Robinson-Briggs' desperate budget gamble

Desperate to avoid proposing a tax increase in the range of 13% as she enters the final year of her term, Mayor Sharon Robinson-Briggs had her budget team -- City Administrator Marc Dashield and Finance and Administration Director Douglas Peck -- do some pretty fancy tap-dancing at Monday's City Council budget hearing.

The Fire Division presentation was discussed, bringing out that the principal funding increase for FY2009 was for anticipated salary adjustments in the range of 4%-4.5%, according to City Administrator Marc Dashield. (The Fire Division contracts are up for renewal presently.)

Discussing the Fire Division's long-range capital needs, the Council was apprised the Division is looking into leasing new equipment rather than purchasing outright. (Fire trucks are expensive items, ranging from around $500,000 to well over $1M -- though a projected life of 15 years puts that in some perspective.)

The Division's proposal to eventually replace the South Avenue stationhouse adjacent to the Netherwood train station with a new facility at a new location caused a bit of a stir, with Councilor Burney wondering aloud if the city could get by with just ONE fire station. (I don't think closing either the Netherwood or West End stationhouses is a good idea. Keep in mind that the length of time it takes the Fire Division to respond to a fire at your home or business directly impacts the premium you pay for property insurance.)

Following that, Mr. Dashield handed out written answers to questions from the previous hearing, and then came the real meat-and-potatoes of the evening: Mayor Robinson-Briggs' proposal on handling the embarrassing $1.66M shortfall in the budget proposal submitted to the state.

I was put in mind of an Abbott and Costello routine.

There was much back-and-forth over which item was being discussed from the worksheet of adjustments recommended by the administration, leaving CBAC and audience members scratching their heads at points.

This was underscored by a shortage of handouts for the public, but more importantly from the format (evidently) of the budget document itself. I was reminded exactly why governors and presidents like to talk about a 'line-item veto' -- because, as in many forms of contracts and other legal documents, EVERY SINGLE LINE OF THE DOCUMENT IS NUMBERED (something Excel can do automatically), making it easy for all to know exactly where the discussion is focusing.

It also seemed to me that there would have been a much shorter and easier-to-follow discussion if we had used an old-fashioned technology like foils to project the page on a screen for all to follow along. Old-fashioned perhaps, but effective.

Finally, the explanation wrangled out was along these lines --
  • The $1.66M is a shortfall in REVENUES, owing to a typo in the proposed budget;
  • Robinson-Briggs proposes to correct the problem with TWO adjustments --
    • (1) Use $3.131M of the surplus instead of the originally proposed $2.3M, an increase of $831,000.
    • (2)Reduce the reserve for uncollected taxes from $3.929M to $3.097M, meaning a reduction of $832,000 to be raised as revenues.
  • Together, the two cancel out the $1.66M error.
When Councilor Burney asked whose responsibility it was to 'fix' the error: would the Administration have to resubmit the proposed budget to the State or what, Dashield threw the ball to the Council, saying they would have to address the matter through their amendments of the original proposal. (Thanks, guys.)

Dashield explained that the reduction in the amount to be raised for reserves against uncollected taxes was pushed to the maximum allowed by the State in view of the size of the error being adjusted for.

Showing itself unwilling to just take the Administration's word for it, the Council asked for the auditors to come to Thursday's budget hearing and explain that the Administration's proposal on the reserve for uncollected taxes was based on a reasonable expectation.

The Council would be remiss in its fiduciary responsibilities if it did not use this as an opportunity to ask 'Who made the error: the city or the auditors?' (The city claimed in the media that it was made by the auditors.)

I think Mayor Robinson-Briggs is making an enormous gamble here.

Solving the shortfall by reducing the amount set aside for uncollected taxes assumes that the taxes collected in the upcoming fiscal year will not only meet, but will actually exceed, this year's rate. The Administration would put the city in a real pickle if there is not enough blood to be squeezed from the stone.

In this regard, we need to bear in mind the dire projections for the New Jersey economy for the next year, as reported widely in today's papers.

As New Jersey, and Plainfield along with it, sinks into what is expected to be the deepest, sharpest and longest recession since the 1930s, Robinson-Briggs' rosy scenario may just be a pipe-dream.

In which case, the City could well fall into an emergency situation in the middle of the budget year and face either raising taxes or cutting services on an emergent basis.

Not a pleasant prospect.

-- Dan Damon

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