As the new Citizen’s Budget Committee prepares to form its recommendations to the public and our elected officials, I pondered aloud to my committee, “what limits our pace of revitalization?”

I’ll get to the answer but first I’ll recap the problem and the solution.

Our economic problems are dangerous

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The theme for last night’s City Council Special Session on the budget was, “The mess we’re in isn’t my fault”.

The administration officially proposed a budget that raises property taxes by almost 20% which would make Trenton’s rate by far the highest in NJ.

The Mayor spoke first.  Let me summarize. Read the rest of this entry »

It sounds official; Trenton is going to have to dramatically raise its property taxes by as much as $.80 per $100 to cover a giant $13,000,000 shortfall.

How did we accumulate such a big shortfall? This is a subject that doesn’t get enough attention.

The reality is that Trenton has been focusing on the wrong priorities for quite some time.
• We’ve given lip service to attracting high income and middle class residents.
• We’ve scared away business development by threatening to force investors to hire Trenton workers.
• And, we’ve embraced every program for the poor there is, thereby increasing our overall cost to serve.

We thought we could get away with all of this because we were pretty successful at begging the State for charity (Trenton pays only 12% of its municipal and school budget).

So now we have a $13M shortfall because the economy turned south and the State’s budget is taking its own hit. As Reinvent Trenton predicted almost two years ago, when the State coughs, Trenton will get pneumonia. See, Trenton’s budget is in worse shape than you think.

The Mayor wanted to put a band-aid on the problem by selling off an asset, The Water Works. But a group of citizens decided to challenge the tactic for a variety of reasons, some more sound than others. The net result is that the petitioners in their effort to block the sale are rubbing the Mayor’s nose in his budget failure. The Mayor can’t argue that it’s the petitioner’s fault. An ongoing concern should never have to sell off assets in order to balance an operational budget.

In a way, the petitioners are rubbing all of our noses in our failure to elect mayors and council members that understood how a city works well enough to avoid this budget disaster. If you look at it that way then they’re probably doing us a favor. We failed in our role as voters. We need to correct our error at the polls this May.

However, the petitioners are wrong in two major areas:
1) The Water Works outside of Trenton is NOT strategic to our city and therefore SHOULD be sold. If not now, then it should be sold sometime in the future.
2) The dramatic increase in taxes will accelerate Trenton’s demise by scaring away investment.

Cooler heads could have prevailed to work out a deal to force a constructive compromise. However, both sides were too stubborn to do what was best for Trenton. The administration could have agreed to aggressive tactics and citizen oversight to fix Trenton’s management issues. The petitioners could have realized that the sale was non-strategic and in the best interest of the city. They didn’t and now both the Mayor and the petitioners are likely to take the ship down with them.

We, the voters will get what we deserve.

Trenton is a boosterish town.  It’s the kind of place where if a visitor said, “My, those buildings look grungy”, his host would say, “Oh no, that’s its patina”.

Ask any Trenton native and they’ll tell you how proud they are of the city, “I’m Trenton Proud”.

What?

We’ve done such a great job running the place that our industry has left town, our education level is among the lowest in the state and we’re on the verge of bankruptcy.  Yea for us! Read the rest of this entry »

Economics is all about the choices humans make and in the aggregate human societies (micro economics and macro economics).  Negotiating can be thought of as a specific case of micro economics closely linked to the core concepts of marginal utility and marginal value.  Therefore, Reinvent Trenton is taking this opportunity to explain basic concepts in negotiation and the role of eminent domain in them. Read the rest of this entry »

This video is a great primer on macro-economic philosophy especially as it relates to how we think about national issues.  AND its a rap.  It doesn’t have much to do with Trenton, but everybody should know more about the basics.

Which are you?  How do you think Obama leans?

A good first step towards Trenton’s revitalization is reinventing its tax system. Restructuring the tax system will take strong leadership, a good ability to communicate and a desire to be a leader in NJ’s efforts to reinvent its urban centers. My hope is that our next mayor can take up the mantle of making this important change. Read the rest of this entry »

The Trenton Times reported in “A ‘Capital’ idea that may improve Trenton” that a state agency, the Capitol City Redevelopment Corporation (CCRC), is seeking the power to use taxpayer dollars through bonds and fees to become a developer in downtown Trenton.  Assemblywoman Bonnie Watson Coleman, is pushing this bill through the legislature.

Bill “S-3116” greatly expands the role of CCRC by Read the rest of this entry »

How many of us have started industrial scale businesses that have gone on to produce great value and therefore great wealth? How many have started industrial companies that produce “green” products?

I suspect none.

I know plenty of entrepreneurs (some successful) but not one has started a successful industrial, much less “green”, company. One can argue that the U.S has regulated all industrial production green or otherwise out of the country. Read the rest of this entry »

Last Christmas, I wrote an article about how community spirit is a necessary and present ingredient for Trenton’s revitalization.

“Community spirit as an economic engine”

Beautiful Trenton is the best example of that spirit to date but there are problems.

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