Member of the reality-based community of progressive (not anonymous) Massachusetts blogs
In a full, regular session CM Bernie Lynch made his case for what he views as the most fiscally prudent way forward, taking into account the $6.4Million the Commonwealth has certified as Free Cash. The CM presented a detailed slide presentation in an effort to convince a majority of the City Council to support his fiscal sensibilities. Your mileage may vary, but Lowell is doing swell on so many fronts. Shouldn’t we just follow along?
A lazy man may say “Yes.” But, we have a Plan E Charter and our Council cannot, in good faith, simply roll over should this manager, or any manager, wink. Fortunately, CM Lynch presents a very solid case for the fine shape we are in. That fact makes it that much tougher to recklessly bat at his logic.
Below we find two of Lynch’s favorite metrics: Cash Reserves & Excess Levy Capacity
These metrics are measures of frugality. We don’t blow our budget and we don’t, contrary to popular myth, tax Lowellelians to death. (The last point drives UTL President Paul Georges nuts.) The take away here is that it is good to build up a rainy day fund, while concurrently leaving money in folks pockets. Some may argue that raising taxes EVER is a torrential downpour. They are full of crap, imho. Next…
This next graph shows what happens when you listen to folks that are full of crap. The “Chapter 17″ set aside is mandated by Beacon Hill. The fuse was lit, folks. You see the “U” shape, or “gutter?”
Yes! We were in the gutter.
Lastly, a favorite slide of the City Manager. I think it is very boring, but he seems to love it. I imagine that if Lynch had any kind of magical ability, he would make this graph appear over Tom Wirtanen’s or Jim Campanini’s head, whenever they kvetched about the “over burdened Lowell taxpayers.”
One thing I should note about this graph, while CM Lynch may L-O-V-E IT to death, the Beacon Hill folks with the “State Aid Ladle” may find it bothersome. See, we are running our fine City on “other people’s money.” The money that comes to us via State Aid. Now, our most excellent state delegation can petition said Beacon Hillers until the cows come home, but we can never really rest easy that the gravy train won’t turn away.
You might think that running a tight fiscal ship would bring mana from heaven, as it were. That all remains to be seen. Thus, when Lynch advocates for stowing the free cash into the reserves, you may want give it heavy consideration. Besides, they are playing a game of chicken down in DC with the “fiscal cliff” and the “debt ceiling limit,” ect. If DC drops the ball, Boston will need to adjust accordingly. I haven’t seen any calculations per state what “sequestration” would actually do to MA, but with the amount of Defense Industry and Gov’t funded research we have here, it can’t be a good thing.
But, I digress …
If Lynch had his druthers, the City Council will embrace Scenario 3
Increasing Reserves and Expedite Capital Plan
- Funds held in reserve for extraordinary uses as needed.
- No Local Aid increase in FY14
- No tax increase in FY13 or 14
- Somewhat manageable $903K deficit in FY14
- Capital spending more than doubles in FY14 to $12 million with record low borrowing and positive purchase period
Because he predicts this scenario will:
- Improved reserve levels to gain improved borrowing costs
- Reserves remain available in the event of decreased local aid
- Reserves remain available for future budgetary dips
- Investment income on reserves
- Expedited capital means more projects move forward sooner
- Tax increase for FY13 and likely FY14 not needed.
Now, if you are not WOW’d by the stunning bullet statements and fancy pants graphs. If you think Lowell was running just fine, while it was in the “gutter,” and that our Councilors should pay heed to the steady stream of ruinous rantings of the “Bumper Sticker Braintrust” over at the Blog of Record, I will impress upon you the inclination of the ratings agency Moody’s:
“Despite significant improvement in fiscal management, the city’s financial position is not expected to improve significantly in the medium term as no provision for significant replenishment of reserves is included in the current forecast. The city’s ability to generate budget surpluses and replenish reserves will remain a critical rating factor going forward. “
Update: Well what do you know? The cub reporter tweets:
Council votes 8-0 to recommend the manager put the $6.4 million in free cash into city’s reserves for targeted use to achieve council goals
Maybe they read the bumper sticker?
Stash that cash
The Lowell Sun
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