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What you need to know for 01/20/2018

Budget battle in Schenectady not over till it's over

Budget battle in Schenectady not over till it's over

Editorial: Mayor and City Council have some unfinished tonight

Round 4 of the city of Schenectady’s budget battle, featuring Mayor Gary McCarthy on one side and the City Council on the other, will take place at tonight’s council meeting. Especially given all that has gone before, the public deserves a ringside seat this time.

For a brief history, on Sept. 30 McCarthy unveiled his 2013 budget proposal, which called for a relatively modest 4.18 percent tax increase and a $20 garbage fee increase. A few weeks later, using information that clearly showed the mayor’s budget was padded — information provided by a former budget analyst whom McCarthy had fired for openly opposing the city’s sales tax agreement with the county — the council passed its own budget that called for only a 1.7 percent tax increase. And that’s where things stood until last Friday, when McCarthy vetoed the council’s budget with little in the way of explanation.

Yesterday he elaborated some. One objection was procedural: McCarthy said the council members adopted a budget with no formal document in front of them, either his complete budget with line-by-line changes or a totally new document of their own. He suggested their action might not even be legal for that reason. This strikes us as a weak argument since the council members were working from McCarthy’s proposed budget and the document they released showed that budget, complete with codes, account descriptions, position titles and savings from their changes.

McCarthy’s other objection has to do with substance, and has more merit. He argues that his budget, with the increased tax revenues, is needed to rebuild the city’s cash cushion (which was recently knocked down to just $75,000 after the city paid a bill) and keep Moody’s from lowering the city’s credit rating to junk bond status. Moody’s action, which would lead to higher borrowing costs and further damage to the city’s reputation, could happen as early as April with the council’s budget, he said.

The council tried to address the surplus issue by setting aside half of their savings in a reserve fund; but with the way its budget is worded, according to McCarthy, the money couldn’t be used for cash flow. That’s one change the council members might be willing to consider. They might even be willing to consider a larger tax increase if McCarthy can show it’s necessary to satisfy Moody’s and put the city on solider financial footing for the long term.

But it needs to be with honest numbers this time, which were lacking in McCarthy’s budget. And with a public discussion, which was lacking in the council’s, where the vote was taken the day after a closed-door political caucus that did not include the one non-Democratic member, Vince Riggi.

The fact that the Democrats held the same kind of meeting last night does not bode well for an open, public discussion tonight.

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