Closing Cranston’s Budget Hole, By Saying Let’s Pretend It’s Not There
Randal Edgar of the Projo captures both the tone and content of last night’s Cranston City Council meeting, where the Council seems to have decided how they will “close” Cranston’s budget deficit: by assuming union concessions that have not yet been obtained…
The City Council charted a financial course Tuesday that differs sharply from the wishes of Mayor Allan W. Fung, approving a fiscal 2010 budget that restores more than 40 jobs, reduces a projected tax hike, levy increase and counts on more than $2.2 million in not-yet negotiated union concessions to make the numbers balance….the Republican mayor called the budget irresponsible, saying before the meeting that it makes no sense to add $2.6 million to the personnel costs he proposed when the council is also reducing tax revenue and counting on concessions that may not materialize.This decision by the City Council to assume non-existent as of yet concessions was made, of course, after they refused to accept a police contract that included $1.4 million in concessions over three years.
The Council approved the final budget by a vote of 7-2 with Councilmen Mario Aceto and Robert Pelletier voting against. I asked Counciman Pelletier the reason for his vote, and he answered that he did not support the tax increase contained in the budget.
Edgar’s article makes mention of the most contentious exchange of the evening, where City Finance Emilio Navarro expressed skepticism about using $1.7 million in Federal stimulus money targeted towards education to compensate for reduced state education aid:
The most heated debate last night centered on the school budget, the one area on which Fung was allowed to comment because he was asking the council to approve an amendment. Fung asked for a $4 million increase for the schools, in part because he had made an error in calculating the minimum city contribution to the schools, which is $86.4 million. The actual city contribution will be $87.4 million because Fung had pledged to provide $1 million more than required, a plan to which the council agreed.
The total school allocation is $122.6 million when state and federal dollars are counted, but councilman Emilo L. Navarro, chairman of the council Finance Committee, questioned Fung’s plan to use $1.7 million in federal stimulus money reach that figure.
Navarro asked Fung repeatedly if he was using one-time money to fund the schools. Fung replied that the issue is whether or not the money counts toward the base budget figure that determines what the city must provide in local dollars each year. Since $1.7 million does not count toward the base figure, the city is not obligated to provide the money again, he said.
I’m not so sure I agree with you on this. Part of the problem that towns have is that they must put out their bottom lines for all to see. If they don’t put concessions in the budget, they’re less likely to get them. (Having voted down a previous contract is a separate matter.)
Perhaps the difference in Tiverton is that the contracts are currently up for negotiation, so no concessions are necessary.
Justin,
The problem here in Cranston is that the previous Council (on which 5 of the current Councilors sat) put $1.5 Million in “union concessions” in last year’s budget (to avoid a tax increase) and never bothered to actually go and get them. It is one of the reasons why Cranston is facing a deficit this year.
Now they want to up the ante to $2.2 Million in “union concessions”, restore all Fung’s personnel cuts and reduce the tax increase.
Why? To make Fung look like the bad guy?
By not addressing the fiscal problems head-on, they sure aren’t doing the taxpayers any favors.
Politics at its worst.
There are legitimate issues involved in determining the baseline when figuring this stuff out, so I probably should have gone into a little more detail about the specifics that have brought Cranston to where it is now; this will be the second year in a row that the City Council assumes that concessions will balance the budget, even though 1) the current year’s operating deficit has resulted, in part, from the fact that the concessions assumed for the first year haven’t yet materialized, and 2) the potential of the police department to take the City to binding arbitration, (after having their concessions offer rejected) means the City cannot assume that the budgeted concessions are certain to happen.
In true Rhode Island fashion, the Council is kicking the problem down the road, and hoping someone in the future will fix it.
“the previous Council (on which 5 of the current Councilors sat) put $1.5 Million in “union concessions” in last year’s budget (to avoid a tax increase) and never bothered to actually go and get them.”
Justin makes a good point. If the money is not in the budget, it cannot be available for distribution when contracts are negotiated.
However, there is the tiny hitch that at some point, the budget numbers have to be realized; i.e., go beyond theoretical numbers in a budget to actual executed contracts. Perhaps one of these Council members can clarify: when do they anticipate that these new (er, second year in a row) contract terms will be hammered out?
Careful, Monique! Don’t fall into the Rhode Island trap of viewing contract negotiations as synonymous with the budgetary process; what’s in a set of contracts and how it gets paid for are separate, though obviously related, issues. The problem in Cranston on the “how it gets paid for” side is that, by forwarding unrealized concessions from fiscal year to fiscal year, the Council is coming dangerously close to using deficit spending to fund City operations.
Two other specific points: 1) I don’t believe that every contract that the council has assumed savings on is an open one, and 2) with respect to the police contract, the Mayor got the concessions, but then the Council rejected them, while still going ahead and budgeting for them anyway.
2) with respect to the police contract, the Mayor got the concessions
I think what you mean is, he made a deal with the police union prior to the election to get what looks to be concessions.
Bottom line is the council nor the Mayor is acting in the best interest of the taxpayers right now.
Rhode Island’s taxpayers new mantra must be:
IT IS TIME
FOR CHAPTER NINE!
The pandering politicians and unions know that these are coming. They just want to maintain the status quo as long as possible, and then have a bankruptcy court make the responsible decisions that they won’t – so they can then say to their respective constituencies “don’t blame me, the bankruptcy judge ordered it – blame him (or her)!”
Some of them are also probably hoping for an Obama bailout along the lines of how he’s just bailed out the UAW with taxpayer dollars. Won’t happen. There are too many states and municipalities also in self-induced fiscal collapse for even the Washington, D.C. printing presses to bailout – maybe one state like California or New York, but not both, much less the other profligate high union density states of the Rustbelt / Northeast.
Tom W
When are the bumper stikers comming out for IT’S TIME FOR CHAPTER NINE?
Kathy,
Someone with a Cafe Press account could design and market them.
I suppose that they could even design for each community:
“CRANSTON IT’S TIME
FOR CHAPTER NINE”
“EAST PROVIDENCE IT’S TIME
FOR CHAPTER NINE”
And so on.
Just to clarify, the budget passed 9-0. Pelletier and Aceto voted for the budget but then voted against the tax levy increase. They are two separate votes even though they are inherently dependent on each other. It would be foolish to split your vote seeing as though the budget relies on revenue generated by the tax levy. A councilmember should either vote yes on both or no on both.
It was a political ploy the proved to be quite lame. Basically Pelletier hoodwinked you in your conversation as referenced in the main post.