The city of Schenectady is drowning in red ink. More than ever, the time for fiscal responsibility is now, but you wouldn’t think that by the way Mayor Gary McCarthy has responded to the latest audit by the state comptroller’s office.
According to auditors, annual deficits are projected to rise and rise until the city’s overall debt brings it to the brink of financial disaster. The city needs to “take action immediately.”
McCarthy believes otherwise. In fact, he has ascertained from the audit that if the city collects more taxes and continues to benefit from the “turnaround in the state pension system,” the deficits can be averted and the city can right the ship without further action.
On the other hand, the City Council recently rushed to override a mayoral veto of its $78 million budget for 2013, which may be less than McCarthy’s proposed budget ($78.9 million), but still leaves the city in a potential $2.2 million hole. While the veto override occurred before the details of the audit were released, the City Council has the ability to amend the budget and should seriously contemplate doing so in a responsible manner.
So when I say amend, I do not mean arbitrarily slashing the budget even more or raising property taxes and user fees to offset the deficit. I am referring to, as Albert Colone wrote in his Nov. 14 letter, aggressive strategies that seek to lower costs without diminishing services and marginalizing taxpayers.
While that may sound oxymoronic, it is not out of the realm of possibility. New ideas and innovative approaches must be taken, because depending on more state aid, higher collection in tax revenue and increasing property taxes is clearly not the answer. It has been the quintessential problem with the city’s budget for the past several years.
The auditors calculated in their projections that the city could and should continue to raise property taxes to the maximum allowed rate (2 percent) in order to address the growing deficits. But the idea that the city can foreclose on more homes, raise taxes year after year, and expect many residents to pay in full or stay in Schenectady is disconcerting, to say the least.
Last year’s budget projected $31 million in tax revenue, but only $27 million was collected. High unemployment coupled with high taxes in a fairly impoverished city, is a sure way to overproject revenue gains. Not to mention that the city still finds itself in a legal battle with American Tax Funding over tax liens and property foreclosures. If the city cannot foreclose, it cannot collect the taxes it so badly desires.
Now is not the time to go back to the basics. It is time to rewrite them. Today’s socioeconomic environment and the way government works for the people is more different than ever before. Therefore, we must adapt and change the way we go about running and funding government. This is not a call for limited government. This is a call for reasonable government.
Source of ideas
That is why I am advocating the creation of a special economic committee composed of working professionals, concerned residents, and even city bureaucrats. This will be nothing like the public forum banter that goes on during City Council meetings. The purpose of this committee is to create new ideas and provide budgetary recommendations to the mayor and City Council.
These sorts of committees are created and are many times very influential on the state and federal levels. Not only would a committee bring alternative budgetary measures to the table, but give a much-needed sense of autonomy to the entire process. The inclusion of such a committee’s recommendations in the 2014 budget and beyond would almost surely gain support from the general public.
First and foremost, the mayor and City Council would need to recognize and offer their support for the formation of the committee and the mission it looks to carry out. An agreement, possibly written and enacted in legislation, should be made stipulating that the recommendations provided by the committee will be accepted by the mayor and City Council, and used to help influence and develop their annual budgets.
The committee should consist of no more than 10 members, including two co-chairmen, and I propose that they be community leaders. SCCC President Quintin Bullock comes to mind, as he has many impressive achievements and is a proven leader. Another candidate would be the former president of Union College, Roger Hull. Mr. Hull is a Yale grad who has a laundry list of public service accomplishments and honors. Both men would bring pragmatism and moderate ideology to the table.
In addition, the co-chairmen would be tasked with selecting the remaining members through a vetted application process. The idea is to allow all interested parties an opportunity to apply, and for the co-chairmen to appoint members with different demographic profiles that they believe will positively contribute to the mission and purpose of the committee.
I would ask that Mr. Bullock and Mr. Hull both step up to the plate and perform this significant civic duty on behalf of their fellow Schenectadians, because the status quo is unacceptable.
The creation of a special economic committee is a step in the right direction. It’s a step toward a brighter future for the city of Schenectady.
Robert Caracciolo lives in Schenectady and is a regular contributor to the Sunday Opinion section.