Archive for 2016

Mayor Jackson gave his state of the city address last night.  He highlighted quite a few things the city is doing and congratulated his staff on their hard work.   What he did NOT do, nor has any Mayor of Trenton in the last 15 years done, is to give numbers that back up successful results.

Several years ago, the Fix Trenton’s Budget Committee which I led, agreed on 5 basic measures of goodness for a city.  Since then I have been reporting on these indicators as an objective way to gauge our progress in Trenton.  It’s not enough, to say we did something, or are working on something or want something to happen.  Rather, the results are what matter.

All five of the following are “lagging” indicators, meaning they represent the past, but they are objective and widely used measurements collected in a consistent way across the state and nation.   There’s no hand-waving with these numbers.

• Crime levels as measured by the Uniform Crime Report
• Population growth as measured by the U.S. Census Bureau (in the case of Trenton, every year)
• Graduation rate as measured by the NJ Department of Education
• Median Household Income as measured by the U.S. Census, and
• Economic success as measured by our Tax Base

Crime is slightly up but murders were down

The 2015Uniform Crime Report represents 18 months of Mayor Jackson’s tenure.

• Uniform Crime Reports for 2015 are 3048
• This is an increase from 2014 of 3%
• Murders were down from 32 in 2014 to 17 in 2015

Holding the rate steady would give the City a C, but since the murder rate declined so drastically I’m giving it a B.

Source: NJ State Police

Trenton is losing population

Trenton’s 2015 census estimate is 84,225 residents.  This is a slight decline of from 2012’s estimate of 84,349.

Losing population is a crippling situation to be in.  It implies that our economy is shrinking, we’re not a desirable place to live and that our property values are going down.   Since 2010 Trenton’s population has decreased -.8% while New Jersey’s has increased 1.9%.   In a growing state, Trenton is shrinking.

For continuing to lose population in growing state, Trenton gets a D.

Source: US Census Bureau

Graduation rates have improved

The Trenton school district’s 2015 graduation rate was 68.63%.  This is an improvement over 2014’s dismal graduation rate of 52.95%

Just about 2/3 of Trenton kids are graduating now.  That sounds better but still 1/3 don’t graduate high school which is appalling and continues to explain the high level of lawlessness in the city.

It can be argued that fixing the schools isn’t a prerequisite for revitalizing the city.  The easiest target market for new residents is the millions of people without kids.  However, failing schools don’t help.

For a big jump in graduation rates though, Trenton gets an A.

Source:  NJ Dept. of Education

Incomes in Trenton are down again

Median Household Incomes in Trenton are down again to $35,647 (2014 numbers) from $36,662 (2013).  These are the latest numbers we have but represent a disturbing trend in Trenton.  Not only are we losing people, but evidently we’re losing higher income people.  This is disastrous for an economy that is largely based on retail spending.  Furthermore, 28% of people in Trenton live in poverty.

New Jersey’s median household income is more than double Trenton’s at $72,062.

For having shrinking incomes, a 3^rd year in a row in a wealthy state, Trenton gets an F.

Source: U.S. Census Bureau

Tax Base is down

Trenton gets an “incomplete” on this grade as it no longer bothers to publish its tax base information on the city web site.  The version published there is almost 2 years old.   So I went digging for another source and found our tax base (for 2015) published on the Dept. of Community Affairs web site.  It gives our tax base as $1,996,653,658 (just under $2B).  This would be down from the $ 2,036,287,800 I reported last year based on the January 1, 2015 City Tax list.

As we can see the numbers are inconsistent, but since they’re all that are available, I surmise that our tax base has in fact shrunk.   To fix Trenton’s budget we need to be adding roughly $100M a year in taxable properties instead we lost $40M in value.

As a comparison, Hamilton’s tax base is over $5B and tiny Princeton’s is over $6B.

For a shrinking tax base that will lead to higher taxes I give Trenton an F.

Source: Department of Community Affairs

Is the city turning around?  Nope!

• We’re in pretty much the same situation we were in last year
• There are some development projects but they aren’t paying taxes yet
• People are still moving away.

That’s not progress.

Link to the 2015 Report Card

Let’s imagine the City of Trenton was managed like a company.   Many have pondered this notion including a few of our Council members.

Of course no one really thinks cities and companies are the same thing.   I certainly don’t.  But I do know that a few basic business principles apply to any organization.

At the top of the list of basic tools is “managing by objective (MBO)”.

Managing by objective is when you give your employees targets to hit and compensate them with a bonus or raise for reaching or exceeding them.    Sounds pretty basic doesn’t it.  Many, if not most management level employees in this country work under some form of MBO plan.

Not in Trenton city government.

We not only do not have objectives; our administration has proposed a 15% raise for the city’s top brass in the face of management failure after failure.  Some of the most egregious of those are listed below.

• Trenton’s tax base has been stagnant and our tax rate has gone up not down.
• Was asleep at the wheel while payroll taxes were stolen – ~$5M hit to the budget.
• Operated without an approved budget for both of its fiscal years.
• Hired an incompetent IT firm.
• Messed up the swimming pool contract and wasted money to hire a new contractor.
• Stole a Christmas Tree from a city park.
• Set a new record in spending on lawsuits
• Oversaw a downgrade of the city’s credit rating.
• Epically failed to plow the streets during our one snow storm in 2016.

The Business Administrator made the pitch for his and the Mayor’s raise by suggesting that it would otherwise be tough to attract talent.   City Council is being asked to consider ONLY this pay hike as a solution.

But consider the argument.

Our Mayor spent $100s of thousands of dollars to get the job he’s got and he knew the salary going in.    All of the employees knew their salaries.  It’s as if a salary pay hike were the only possible improvement the administration could think of to make Trenton a great place to work.

I can think of plenty of ways to make working in Trenton City government attractive.

How about setting objectives for the city and its departments?

People love having clear goals in their job.   Great companies are great because their employees are fixated on common measures of success.  For instance, should top city execs be working towards objectives for increasing our tax base, lowering crime rate, increasing the population, improving our per capita income, increasing the graduation rate and lowering taxes?

What if we gave bonuses tied to meeting or exceeding those objectives?

If I’m an aspiring economic development director, I’d love a chance to put my plans in to place and profiting from my effort.   I’m sure most citizens wouldn’t mind at all if a Department Head made a big bonus based on our property tax rate going down.

What if we got rid of our residency requirement?

It’s just common sense that a high performing local employee from a neighboring city would be wary of uprooting her family to move from East Windsor or Princeton just to take a job 7 miles away in Trenton.  What company forces their employees to move 7 miles in order to take a job?

What if we improved working conditions?

This is a broad category but do we really think Trenton is the best organization on the planet to work for?   Does it provide a transparent management environment?   Are goals clearly communicated?   Do customers (i.e. citizens) respect the organization?   Do we provide employees modern tools like E-Government?  Do departments have ways of measuring success, for instance citizen satisfaction?

Handing out raises beyond the 1-2% Cost of Living Adjustment (COLA) is just throwing money away.   We need to be smarter than that.   Trenton does need to attract top performers, but they need to be the kind of people that are OK with tying rewards to success.

What can you do?

Trenton’s leaders are immune to this kind of thinking as is evidenced by City Council’s positive vote on an ordinance to grant the administration’s salary increase request.   Every member of the pubic that spoke at the meeting was against it, yet our Council voted for it anyway.

A group of petitioners has set in motion an effort to overturn the measure should it succeed on its second reading in two weeks on September 15 (all ordinances in Trenton need two successful votes).    The petitioners are asking citizens to sign an e-petition in advance of the vote to provide an indication to Council on the likelihood of a petition fight.  If the ordinance passes, the petitioners will have 20 days to collect just over 800 signatures.  The e-petition will make that task easier.

Link to Petition to oppose Trenton’s 15% salary increase for top management

Trenton isn’t doing so well and it hasn’t for a long time.   Economic activist like me have tried in vain to recommend sound fiscal policy that would “right the ship”, but no one’s listening.   Why not?

Well, to understand why, voters have to look within themselves.

How would you feel about a politician who only talked about tax policy and zero based budgeting?  Boring right?   Well, what about a politician who stood in front of a podium and talked about how the city funded a park clean-up, or a books for kids program, or Meals on Wheels.

Why you’d think that person was pretty nice.   And so it goes.   Trenton political policy over the years has been all about handing out turkey’s at Christmas,  funding block parties, giving city land to non-profits and doling out other people’s money to this charity or that (depending on who’s in favor).   The Pork Roll festival doesn’t happen once a year, it’s an everyday event in Trenton.

Trenton and most other poor cities are awash in this kind of money.  It comes from grants including Community Development Block Grants and private money.  Sometimes it comes straight from our tax dollars and the money the state gives us.  But none of it has anything to do with fixing our economy.  And, fixing Trenton’s economy is the only thing that matters.   Spending every single dollar including the dollars we allocate to managing CDBG funds should go to reducing our crime rate and stimulating new investment.

Every second our elected and non-elected politicos spend on spreading the pork around, is time wasted.

So look inside yourself.  Do you want our political class making you feel warm and fuzzy or do want crime to go down, our tax base to go up and then hopefully, our tax rate to go down?

We need to all get a little cranky about how Trenton, the State and the Federal government spend our money.   As Trentonians we need to tell the State and Federal government what we really need, not what will make a local charity and its supporters feel good.

We need to focus like a laser beam on boring ole economic policy.  We need to run basic services better than any other city in the nation.  We need to have the most aggressive approach to crime prevention ever imagined.

If you hear a politician talk about anything else, they’re blowing smoke up your butt.

Trenton “peaked” decades ago.   My cursory research into the city’s history points to a high point either the late 1920s when the city’s population was around 140,000 or perhaps in the 1950s when much of America was enjoying a post war boom.   However, since then broad, and well known economic and social forces have conspired to challenge industrial cities like Trenton.

Some cities have responded to the challenge and have reinvented themselves.   We know about Savannah, Pittsburgh and to some extent Cleveland and Cincinnati.   Cities in the South like Winston-Salem and Richmond managed their way through the change.   It can be done.   Trenton didn’t do it.

Instead of revitalizing, Trenton has sunk to lows unimaginable in America’s new suburban townships.   We’ve squandered millions of dollars on publicly owned hotels and parking garages.   A Mayor has been sent to a Federal penitentiary.  Our graduation has sunk to below 50%.  Below 50%!   Our murder rate has flirted with being the highest in the nation.  We’ve had almost $5,000,0000 stolen from right under our noses.  Our water has been unsafe.  Our taxes are the highest in New Jersey.  We’ve lost population.   Over half of the land in the city is tax exempt.   We’ve closed our libraries.   Our City Council has failed to provide oversight and occasionally Council meetings turn in to fist fights.  The list goes on.

However, the people of Trenton are not helpless.  We can take control of this problem and provide the ultimate fix.

We can tear down our form of government and start over!

In 1962 Trenton did just that.  The Trenton Council at the time formed a citizen’s commission to study the problem of whether the current form of government was appropriate for the times.  That group took a year and developed a very considered opinion that “no, it wasn’t”.  They therefore recommended that the City adopt the now familiar, Strong Mayor form of government as outlined under the Faulkner Act of the State of New Jersey.   The Faulkner Act spells out several different forms of government including a strong Mayor, a weak Mayor and a City Manager approach.  So no, we’re not locked in to what we have now which spells out 7 council member (4 of them At Large), a Mayor and a Business Administrator.   We can decide that this isn’t working for us.   The evidence (population decline, tax base decline, income decline relative to the State, graduation rate decline and high crime rates) would suggest that it hasn’t “worked” for some time.

Link to 1962 Commission Report

Link to 1962 Ordinance Forming our new Government

One of three things can happen:

1)      The Trenton City Council can take action to form a citizen’s commission to look in to the matter and if needed propose a change.  The change, if recommended would be voted on in a city referendum.  This process would take about a year.

2)      Citizens can form a committee on their own to force the creation of the citizen’s commission.  This action would be similar in scope to Trenton’s recent recall ballot measure, our Pay to Play ballot initiative and smaller ballot measures to simply stagger terms in office for City Council

3)      We can do nothing and hope for the best

The most interesting of the several options under the Faulkner Act is the Council – Manager form of government.  This would allow our elected City Council to hire a professional manager. Typically, this is used in smaller cities where the local talent pool isn’t likely to produce a professional city administrator.   The upside is that we can give this “employee” goals, they can be selected from a national pool of candidates with resumes and the Manager can be fired if they aren’t doing a good job.  The downside is that, much like a school superintendent, the positions is very political and the manager serves at the whim of City Council.

It’s worth thinking about.   Much has changed in Trenton since 1962.  We’ve gone downhill.  Our city’s population has radically changed, the industrial economy has collapsed and the Internet economy has been established.   Not much has changed in Trenton’s government.

Activist like myself and Kevin Moriarty have talked openly about mounting such an effort.  Others have voiced support.  But like the recall, it’s a big effort, especially if our City Council stands in the way of at least considering a change.   We assume they and the current administration will resist even thinking about it.   But that shouldn’t stop the long suffering citizens of Trenton.

Voice your support for the idea of considering a change to our form of government.   Let us know.  From where I sit, it’s much easier to lead if you know you have support.  Better yet, let our City Council know that you want to consider a Faulkner Act change.   A Council action to form the commission will immeasurably simplify the effort by avoiding a costly public referendum.

On Thursday May 5^th, Trenton’s City Council will vote on an administration proposal to sell a bond (i.e. take out a long term loan) to pay a debt to the Internal Revenue Service caused by our payroll company (IPS) having stolen employee payroll taxes.   The amount of money is large, $4.7M so paying for it out of Trenton’s current funds is impractical.

As of this writing neither the public, City Council nor I know the proposed term of the bonds (I assume 15 years),  whether this is all that Trenton will owe (do we owe the State of New Jersey money?), will we recover money from IPS (the thief) or even how did this happen?  The City of Trenton has been stingy on letting taxpayers know what’s happened to their money.   That’s too bad but blogger Kevin Moriarty has done a great job writing about it and actually researching what’s going on.

I’m hopefully calling this a mistake because our administration shouldn’t have been so lax in its supervision of IPS.   It was a mistake to renew IPS’ contract even after the city was warned that IPS hadn’t been paying payroll taxes to the Federal Government.   Kevin’s research is turning up facts that potentially make this worse than a mistake, but for now I’ll chalk this up to plain old bad management in City Hall.

Reinvent Trenton mostly restricts itself to the economic issues and that includes how we use the budget as a policy tool.  So when a proposal (as vague as it seems) gets floated to fund a large $4.7M mistake made by the current administration over the next 15 years, in order for future voters to enjoy paying for a current problem, I take notice.

Responsible money managers know as a basic fundamental tenet that long term debt should only be used to fund long term assets.   We fund new water treatment facilities, new garbage trucks and even new hotels with long term debt (i.e. bonds).    We do that in our personal lives as well, our houses and cars are funded with long term debt, but not our clothes and food.

This $4.7M payment is a current liability and if we don’t have the funds in our budget we have only two responsible options:

1) change our budget by cutting something, or

2) fund it with short term debt (2 years or so) and raise taxes to make the payments.

Funding this mistake should happen during the course of this administration.   Spreading out our pain over 15 years deflects responsibility for this monumental blunder to future Mayors and future generations.   As voters and taxpayers, WE are responsible for this administration and this City Council, therefore we are responsible for the pain that our voting decisions have wrought.

Our decisions about how to budget and fund our operations are important.  They’re important in both matching priorities to our precious tax dollars and they’re also important in matching the benefit (or pain) of an expense to the actual taxpayers who will receive the benefit, or pain.

I know that none or our elected officials want to burden current taxpayers with this $4.7M mistake.  I’m sure that some voters would prefer to kick the cost down the road.   However, we are stewards of the financial health of our city.  Pushing this mistake into the future is both wrong and unfair to future voters.

Living in Trenton its easy to understand the appeal of Donald Trump’s message.

As a city, we’re losers so often that it just feels normal. So when we hear a guy talk about turning that around and being winners again, or just doing things well (as a government) it’s attractive. You wonder, what would that feel like?

What would it be like if we didn’t have our money stolen, if we could hire a real IT firm, if we could enforce our laws (big ones and small ones), if we had a tax policy that didn’t punish new investment?  What would it be like if we could communicate and enforce trash disposal policies instead of seeing it thrown all over our streets?

What would it be like if we didn’t get confused by letters saying our buildings were vacant, our water bills were past due and our taxes weren’t paid when they really were?  What would it be like if our water department weren’t running one illegal scheme after another out of their building?

What would it be like if our leaders could be transparent about the city’s issues? What if they didn’t brawl at public meetings?  What would it be like if we didn’t have to file Open Records Act forms to get information from the city, what if they just posted it online?  What if our Mayors didn’t get sent to Federal prison?

What would it be like if our snow was plowed, our potholes were fixed and our broken sidewalks and streetlamps were restored to their original state?

What would it be like if the only hotel in town weren’t about to close and taxpayers hadn’t spent $65M to build it?  What if hockey teams and arena football teams didn’t fail in Trenton?  What if we didn’t give away prime real estate to “connected” non-profits that don’t pay property taxes?  What if we could have a budget passed before the fiscal year starts?  What if we could pay for our own schools?  What if they actually graduated most of the kids?

What if the contaminated dirt at MLK school had been dealt with honestly?  What if we didn’t invite corrupt developer Robert Kahan in to Trenton? What if we didn’t fall for the Manex ponzi scheme? What if we hadn’t turned the historic Douglass House in Mill Hill Park into a drug den? What if we hadn’t forced the Broad Street Bank to be rent controlled? What if we hadn’t ignored Chambersburg’s concerns before the restaurants left?

What if simple building inspections only took 4 hours (like in Philadelphia) instead of 3 weeks?   What if you could communicate with the city through its web site and via email?

What if our property tax rate wasn’t the highest in New Jersey (the state with the highest property taxes in the nation)?  What if drunks and drug dealers didn’t infest our streets?   What if thieves were actually afraid of being caught?

What would it be like if we could recommend that a friend move to Trenton?

What would it feel like to live in a city of winners?