Budgeting and Spending
Stop me around the part that no longer makes any sense.
Here are some values for you. This theoretical family nets $61,000 a year in income. That’s after taxes. However, they find that in spite of cutting everything they think they can cut and is unnecessary, and trying to bring in extra money through second and third jobs, they still find themselves short by about $1,800. In other words, they still have $1,800 worth of expenses that are going unpaid. Then, in spite of the fact that they have a perfectly good 20 inch black and white tv, they decide that it’s time to go to the local electronics store and purchase the latest and greatest flatscreen television for $4,000. That’s $4,000 that they don’t have in cash or in savings anywhere, they decide to simply put that on a credit card.
Does this make any sense at all?
This is pretty similar to what Providence is doing right now. The city has a near $614M budget, and according to today’s GoLocalProv.com, they have a $17.9M operating deficit. This in spite of all the cuts that the mayor has been able to negotiate through various sources, and all the extra payments he was able to get from the city’s non-profits. They’re still nearly $18M short of being able to pay all of their bills. So then why does it make any sense at all to ask the taxpayers to approve a $40M bond to repave some city streets?
The story here is that if you can’t afford it, you can’t have nice things. If you’re already short on paying all your bills or doing things like:
the city’s plan to underfund its annual required contribution to the pension system by $10 million
then you should not be taking out loans and borrowing more money for what I call the “nice to haves.”
Seeing as that it will probably take a year or so until all the roads would be completed, the timing is interesting. The Providence mayor would at that point be up for re-election or possibly to some higher post. “Hey Providence, how do you like those shiny new roads I gave you?” leaving out the part that “you paid for it…with interest.”
Is it really a gift if you paid for it yourself?