Posts Tagged ‘Mayor Palmer’

I should point out the central fact that is in dispute in the Mayor’s speech on March 30th.

Mayor Palmer claims that the State should be paying us $155M if they were taxed at our rate (~let’s say 3% effective). That would equate to a valuation of state property of roughly $4.5B.

However, DCA estimates the value of all public property in Trenton which includes State, City and Federal buildings (but doesn’t include schools and the arenas) at $1.4B. Based on this number and some analysis by TDA and my guestimate, I’d say the State valuation is more like $1.2B. With that valuation in mind, the State would owe more like $36M/year in PILOT.

Trenton’s actual ratable value is $2.1B (the number our property taxes are based on).

A disagreement about this basic fact would lead to two radically different positions. If the Mayor is right, then the State is a deadbeat like he said. If my calculations are right, then we’ve been receiving aid for a long time because the State currently funds us to the tune of $340M ($250M for schools and $90 for municipal).

Where we agree is that a sudden $42M decrease in aid (or whatever you call it) would be disastrous, just as the Mayor said. The big difference is the negotiating position we go in with.

I’ll stress that the above are my numbers (so far). The Committee to Fix Trenton’s Budget is working to get to the bottom of this and develop a group position and then an approach.

In light of this evening’s speech, I thought it useful for my neighbors to have this perspective. Look for a more for the FixTrentonsBudget.org group.

I wish it didn’t take brinksmanship to force constructive dialogue in Trenton.

Everyone agrees (I hope) that we need a rethink about Trenton’s financial health. Everyone also agrees (I hope) that there is a price at which selling the suburban portions of the Trenton Water Works is a good idea.

And, let there be no doubt that it’s too late to patch this year’s budget. Without drastic action we’re facing catastrophic disaster from a tax hike that will drive away investment, force foreclosures and thereby further reduce city revenue.

My hope is that the administration and petitioners can reach an agreement that commits the city to budgeting, openness and planning reforms that address our structural problems. I also hope that they can reach an agreement to allow the sale to move forward and, as stipulated in the City Council’s resolution, use only $20M of the proceeds to fix budget gaps. The remaining $60M should pay down long term debt principal.

Emotions are running high on both sides, for all of our sakes, let’s hope and pray cool heads prevail.

A Modest Proposal to fix the budget and still keep the Water Works

In “Invest the Trenton Water Works proceeds in the future not the past” I argued that the proceeds from the sale of the Water Works should not be applied directly to the 2010 and 2011 budgets. I allowed that it was too late to fix the 2009 budget and therefore $20M of the proceeds should be used to patch this year’s gaping budget hole.

If a group of Trenton citizens have their way, the sale will be delayed until a public vote can be taken and it’s not certain at all that the public will go along with the administration’s plan. We’d be left with a huge problem. Therefore, we’d better come up with plan B for patching the 2009 budget. Read the rest of this entry »

That the suburban portion of the Trenton Water Works will be sold seems to be a foregone conclusion. This is a good thing.

Running a water company for Ewing, Hopewell and other towns isn’t core to the business of running Trenton. It’s safe to say that we have more pressing concerns than whether or not our neighbors to the north have good water pressure. Continuing to run TWW would stretch our already thin and getting thinner, management resources.

Those that argue against the sale need to consider the big picture.

Read the rest of this entry »