How did Trenton get to this point?

As Trenton’s low point approaches, let’s not forget that it was 20 years of previous administration that led us here. The current group has just put the final nails in the coffin.

We’re laying off 105 police officers because our municipal budget is over $200M and Trentonians already pay the highest tax rate in NJ just to contribute $70M of that amount. Contrary to popular belief, the State of NJ would pay almost that same total, plus almost ALL of our $300M school budget.

Trenton’s taxpayers are nowhere close to being able to pay for their own government. The state currently owns roughly 25% of property value in Trenton and pays over 40% of the cost of municipal and school budgets.

We could keep the police officers but our property taxes would have to go up an additional 12% or so, thereby bankrupting many of us.

How did we get here?

  • For 20 years we’ve added more affordable housing than any other city in NJ *. This kept our average income and housing price low relative to the rest of the state and continued to push up our police and school costs. We are overindexed on families with low disposable income. This makes Trenton unattractive for retailers.
  • Through inattention we’ve driven away almost every large private employer. We’ve agressively, beat down developers with arrogant demands. We’ve failed to reinvent our tax code so that it now punishes new development.
  • We’ve elected officials who failed to understand the linkage between budget, policy and our city’s health. Voters had only to spend 60 secconds during the election and they could have discovered that most of our current leadership was not up to the task of saving the city from its current plight.
  • Its been ignorance and pride that have brought us to this point. At some point Trentonians will have to do the hard work of taking responsibility for their city. The State can be a partner but Trentonians must cooperate in good faith. We must show a plan for recovery. We need to lead.

    * BTW – According to COAH’s Guide to Affordable Housing Trenton has 7799 affordable housing units (even before including Trenton Housing Authority or section 8). Readers should be aware that there are only 22,000 or so households in Trenton. This means that over 1 out of every 3 homes in Trenton is affordable housing.

    Trentonians favor fewer services and lower taxes

    This report was produced by The Fix Trenton’s Budget Committee and is reposted here
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    As part of a broad Priority-Based Budgeting exercise initiated jointly between the Fix Trenton’s Budget Committee, Beautiful Trenton and Trenton Council of Civic Associations with support from The City of Trenton, an in depth survey on budget priorities has been conducted amongst city residents.

    Over the last four months 202 Trentonians have completed a comprehensive budget survey either participating in person at Ward budget forums or online through a specially designed survey tool. The survey was unique in that it used actual budget numbers and asked respondents to make forced choices between taxes and spending increases or decreases in levels of service. For instance, if citizens wanted to increase the number of police on the street they had to either increase their own property tax or reduce service in other areas such as recreation or public works. It mirrored the tough choices elected officials have to make when balancing the budget.

    “This is the first time such a large and in-depth survey of Trentonians has been conducted about the budget and how their tax dollars are spent”, said Carlos Avila of Fix Trenton’s Budget. He added,
    “Other cities such as Philadelphia and San Jose, CA have successfully used citizen input like this to help make hard choices in spending.”

    By holding forums in familiar neighborhood locations, each sponsored by a City Councilperson, the organizers were able to reach a large cross section of Trentonians. In addition, the web based survey allowed a broader response. Our sample size of 202 was enough to provide 95% confidence that our results were representative of the 37,479 registered voters in Trenton with a 7% margin of error for each answer. Nevertheless, we hope to every year improve the methodology of this exercise and attract more participation from residents.

    We’ve tallied the results and found that Trentonians favor lower spending. Of the $92,000,000 in departmental spending included in the survey, respondents voted to trim the amount by $7,000,000 to $85,000,000, a reduction of 7%. The total city budget for 2011 is $205,490,000 which also includes debt payments and benefits. The survey showed that Trentonians expected this savings to result in an 8.5% decrease in property taxes or roughly $400 per $100,000 in assessed value.

    The following chart shows the weighted results of departmental budgets if left to all 202 respondents.

    In particular Trentonians favored less spending in the following areas.
    The following chart shows the percentage of respondents who voted to increase, maintain or decrease spending by department.

    Perhaps as a hint of dissatisfaction with the current political climate, 64% of the survey takers favored reducing the administrative budget which includes the Mayor’s salary, his aides and City Council. However this cut amounts to only $1,000,000. Respondents also voted overwhelmingly to withhold pay raises for city employees.

    Survey takers put Fire and Police spending under pressure as well. A surprising 38% of respondents favored decreasing Fire spending and only 7% voted for an increase. Trenton Police did a little better with 35% supporting reduced police protection and 15% hoping for increases. This is significant as Fire and Police make up one quarter of Trenton’s total city budget. While roughly half of the survey participants voted to keep spending the same, the downward pressure on spending is at odds with the administration’s past priority of maintaining current levels. The study shows that the recent realization that budget levels may have to be reduced will not meet as much resistance as expected. According to comments in the survey, the “4 on, 4 off” police scheduling policy was unpopular among respondents.

    Public Works showed weak support as 42% of survey participants wanted to decrease spending while only 13% favored an increase. Health and Human services also had weak numbers with 49% of respondents calling for a decrease. Several respondents commented that the County should take over Health and Human Services.

    Several departments attracted pleas for increased investment.

    Inspections and Economic Development received support for increased budget by 32% of respondents. This is attributed to the belief that spending in this area will lead to increased levels of investment in the city and better quality of life. Many respondents wrote in comments such as “limit affordable housing to 20% of total”, “Kill off the Miller Homes project”, “We need more market rate housing” and “Focus redevelopment in a few areas”.

    A substantial 31% of survey participants favored reopening all of the Library branches. However, 51% were OK with just the main branch being open and just over 17% favored closing down the entire library system. Similarly, 39% of respondents favored increases in Recreation spending and 11% favored eliminating the department.

    In addition to concerns about departmental functions, respondents left a large number of other comments about the budget.

    Survey participants seemed anxious for a new relationship with the State “The state should pay its fair share” was a popular sentiment. Others felt that Trenton should “discontinue police protection in the State House district”.

    Respondents were not short on additional ideas for raising revenues. Parking taxes and improved violation enforcements topped this list. Privatizing trash collection and charging more for pick-up was a popular idea. Trentonians especially wanted to tax non-residents by way of “commuter taxes” and increased fees on non-resident landlords. Enforcing laws was also seen as sources of income through fines for loitering, increase court fines and using drug seizure money for community benefit. Other ideas included running a Police Academy for profit, an entertainment tax, a wage tax on non-profits and selling the Marriott.

    The results of this survey are illuminating. They show a willingness to sacrifice but more importantly show that Trenton residents have specific priorities in how they would like their government to invest its scarce resources. Both the Mayor and City Council have supported this effort so Fix Trenton’s Budget and Trenton citizens look forward to the incorporation of these results in the 2012 budget.

    Trenton can’t rebuild on a bad racial attitude

    For the past year I’ve been working pretty hard as a volunteer to support the administration by providing what I hope are responsible processes for engaging the public in designing a fiscal way forward for the city. As part of the Fix Trenton’s Budget Committee, I’ve helped elicit public priorities about the budget, I’ve helped propose a budget process that would lead to more deliberative choices and I’ve helped to put forward new ideas on revenue especially the Land Value Tax. In addition, I’ve respectfully suggested that we take a more pragmatic approach to our support for subsidized housing. These efforts have met with mixed success.

    The Fix Trenton’s Budget Committee’s efforts have been mainly targeted at helping the city to be more responsive. However, over the years, I’ve also dedicated this blog to many of the fundamental economic principles that could lead Trenton to revitalization. Many of these ideas are difficult for citizens to get excited about. Most people’s eyes simply glaze over when they read about money.

    Certainly my ideas have fallen on deaf ears in both the previous and current administrations and for the most part on both the previous and current city council. Math and fiscal discipline aren’t fun. I get that.

    However, allow me to point out another economic truism that should get everybody’s attention.

    Civil unrest is bad for business.

    The racial intolerance and threatening language that the Recall Mack campaign workers experienced this week from the Mayor’s supporters including his brother, is a sign of a civil unrest in Trenton. It belies an undercurrent of hate that’s been stoked by the Mayor’s supporters that could easily lead to violence.

    Rarely do vibrant economies flourish in this kind of atmosphere. Can you imagine a white family wanting to move to Trenton when city workers and the Mayor’s political supporters shout racial epitaphs at their white neighbors? Would black families of good nature come here? Hispanics or Asian? If I had seen this 11 years ago when I was deciding to invest in Trenton I know I would have reconsidered.

    With this kind of attitude in City Hall, how will ideas meant to attract investment (some of it from white developers) ever win public support. Anything a white person suggests will be met with suspicion by a populace emboldened by their leadership to think “black first”. We just can’t have that.

    It’s difficult for me to feel good about suggesting economic ideas to help the city when I think that my neighbors and perhaps even our city leaders will discount them because I’m white.

    Trenton is a difficult situation and it’s going to take the best ideas in this country to fix it. We don’t have the luxury of wallowing in a pit of racial hatred.

    In fact, I’ll go further and suggest that one of the key ingredients to reinventing Trenton is for this city to be seen as a bastion of racial harmony. New residents and investors like racial harmony and avoid the kind of hate speech that’s happening in Trenton today.

    Trenton’s Budget won’t fix itself

    Written for the May 2011 issue of the Trenton Downtowner
    In a democracy citizens get to rule themselves. We elect representatives who are responsible for doing our bidding. The theory of this republican form of government is great; however there’s often a disconnect.

    We forget that democracy was invented thousands of years ago when governments were smaller and simpler. That changed as Trenton and the rest of America became part of a national and global economy.

    We didn’t keep up and now one of the great challenges of our age is reinventing post-industrial cities like Trenton.

    Why should we expect our leaders to know what’s needed to turn Trenton around? They haven’t done it in the last 20 years. Instead we have declined in population and lost ground in income. Perhaps the collective wisdom of voters could provide better insights.

    You might say, “They don’t listen”. Well perhaps we haven’t delivered a clear message.

    Unfortunately most citizen input is undisciplined. Everyone wants everything: libraries; more state aid; more development and less crime. Governments and our economy don’t work like that. There are no magic wands.

    We have to use our budget as a strategic instrument of revitalization policy. It’s not enough just to reduce the budget. It needs to be used wisely to further our goals of investment, safety and standards of living.

    We need to balance investment in livability (safety, trash pick-up and social services) with investment in the future (lower taxes, improved technical inspections and marketing.)

    We can’t just wait for a revitalization savior to show up in Trenton. Instead, we can leverage the wisdom of the masses to help make the tough choices that political leaders can’t make themselves. Priority Based Budgeting provides an opportunity to do exactly that in Trenton.

    A group of fiscally minded Trentonians organized the Fix Trenton’s Budget Committee to work on efforts important to revitalization. One of those efforts is a budget process that includes citizen input as its driving force. Led by Carlos Avila and Bob Lowe we got the Mayor’s and City Council’s support to do this starting in the fiscal 2012 budget (beginning July 1, 2011.)

    With Beautiful Trenton and the Trenton Council of Civic Associations and council members: we held community input meetings. To make sure we collect as much input as possible, we’ve put the survey online and will keep it open through May.

    The output of the surveys will form the basis of a position paper for city council that will communicate its budget guidelines.

    The Priority Based Budgeting process allows citizens to present their own budgets. People’s priorities are different. Some want lower taxes (we have the highest tax rate in NJ). Some want more services. Others want more investment. We all want these things but we have to balance the budget and now voters can make the same tough choices as our leaders.

    We’ve prepared a survey that presents the budget in a simplified form. We ask you to vote on discretionary items. These include our tax rate and the department spending which directly impact the levels of service that can be provided. We held the items that are beyond our control like state funding, debt service, employee benefits, grants etc constant.

    Choices include two or three reasonable levels of spending and several different tax levels. Dollars are converted into points that make the math easier. But the spending has to equal the income.

    The budget survey can be found at FixTrentonsBudget.org. This is our first year using this process and we look forward to continuous improvement.

    In addition to the budget survey, there’s also a questionnaire asking for your opinion on new revenue enhancing ideas. For your convenience there is also a Spanish version.

    It’s our budget and we all have to be responsible for it. If we don’t do it, who will?

    We need a plan behind the Mayor’s Vision

    Mayor Mack gave his first State of the City address tonight.  What a great opportunity to lay out a vision and plan for the city you love.  What an opportunity to solidly address Trenton’s number one problem, its economy.  What a great opportunity to turn around a tumultuous 1st year term and silence the critics. 

    What an opportunity not taken. Read the rest of this entry »

    Property Tax: Friend or Foe

    No matter what you hear from boosters selling you rose colored glasses or what you hear from detractors who think everyone who visits the Capitol City gets shot, Trenton’s economic situation is bad.  Our per capita income is about half the average for New Jersey as is our assessed property value.  We can’t afford our own municipal government, much less our schools.

    We’re overburdened given our size and even with state and federal aid, our tax rate is high. The plain truth is that our tax rate for 2011 will be the highest in NJ.  In this regard, our property tax is definitely, “foe”. Read the rest of this entry »

    Trenton’s Rebirth

    “Trenton is in rebirth.”

    That’s the claim Mayor Mack’s aid, Lauren Ira, made in her op-ed piece in the Trenton Times.  Along with that she criticized people like me for questioning the Mayor’s ELEC habits, the city’s poor contracting, it’s improper and misguided attempt to sell city homes.  We are chastised for complaining about the Mayor’s failure to discipline his brother, delays in appointing a cabinet and lack of a city budget along with other public missteps.  Read the rest of this entry »

    Let’s Fix the Knowledge Gap on Trenton’s Finances

    Trentonians have been kept in the dark for far too long about our city’s budget and economy.  Oh sure, administrations have done their perfunctory job of presenting numbers to the city council and the papers have carried a story here or there.  But no one’s ever explained the problem.

    This coming Monday, February 7 that all changes. Read the rest of this entry »

    City’s Housing Director should be fired

    I’ve been patient both on this blog, on Facebook, in private emails and in person trying to explain how low income housing projects can’t generate enough tax revenue to offset the cost of supporting the residents.  I’ve gone on to explain what level of market rate development Trenton needs to achieve self-sufficiency.  I’ve made specific recommendations.  I’ve even started a citizen’s budget group to work with the Mayor and City Council on the budget and revitalization. Read the rest of this entry »

    A new year and a new attitude at our hotel

    Ten years ago the Palmer administration decided Trenton needed a full service hotel.    With the help of a group of boosters, including local businessman Shelly Zeiger , the administration shopped the idea around to investors. No one bought.  That didn’t stop this group.  They convinced the city and the state to fund a $46,000,000 hotel with a Marriott brand. 

    The city effectively owns the hotel and manages it through a non-profit entity called the Lafayette Yard Community Development Corporation (LYDC).    The Mayor appoints the board and during the Palmer administration it was largely controlled by the city business administrator.  Read the rest of this entry »