Spend spend spend

Free love! (And free lunch and auditoriums and pools and ….)

Greenwich’s long term debt will be $190 million next year and certain Democrats think this is just fine and in fact we should spend more.

In an attempt to placate skittish ratings agencies about the town’s creditworthiness, the Board of Estimate and Taxation established a $210 million cap last year on borrowing, a practice that has long been taboo in pay-as-you-go Greenwich.

The policy also limits the amount of money the town can apply toward debt service and interest payments to 70 percent of the capital tax levy, the amount of tax revenue dedicated to infrastructure projects and equipment upgrades.

The debt ceiling measure is subject to review every two years, which can’t come soon enough for some office holders, including Selectman Drew Marzullo, a Democrat in his second term.

“It is an artificial number that does not take into account the long-term needs of the town,” Marzullo said. “No one has demonstrated whatsoever the positive or negative impact this might have.”

“Either we’re going to have to increase the debt ceiling, talk about longer-term borrowing or don’t do projects that need to be done,” Marzullo said. “The other option no one wants to talk about is to increase the mill rate. I can hear the guillotine being sharpened now.”

And Marzullo isn’t alone in this philosophy of spending what we don’t have. here’s this from a FWIW reader:

C’mon Chris. I know you consider yourself a contrarian but resorting to hysterics about what the town can and can not afford is beneath even you. Yes, things are bad in Europe and the macroeconomic picture in this country is not good either. Though, in the grand scheme of things MISA is not going to bankrupt us and is a decent attempt at giving this Town’s infrastructure a nice shot in the arm. When is the last time this Town really spent some money on a luxury item….schools, fire stations, police stations do not count. You are a broker…you can’t keep selling this Town as NYC North with exorbitant real estate prices without sprinkling in a few high end amenities once in awhile. This ain’t Mayberry anymore….let’s stop pretending.

Dig in, grip your wallet and fight, fight fight. People like that Marzullo and the reader think that Greenwich will be more attractive if  it has a new municipal pool, an expensive high school auditorium and God knows what other “luxuries”, these people can dream up. A low property tax and a well-maintained infrastructure is our draw, not new pools.

23 Comments

Filed under MISA

23 responses to “Spend spend spend

  1. Chief Scrotum

    At what tax rate do people start looking at other towns?

    Perhaps another view – http://www.nytimes.com/2012/05/08/nyregion/in-montclair-elections-cause-town-to-re-examine-itself.html?pagewanted=all

  2. Cobra

    Greenwich is becoming the new California, fiscally speaking.

  3. I think increasing the mil rate is a fabulous idea. It will provide an immediate boost to housing values in Westchester.

  4. anonymous

    Greenwich property taxes are BY FAR the lowest of any town in the CT/NY/NJ suburbs–it would take years of 10% increases to get to the point where we don’t compare favorably on this metric to the surrounding towns. I’m a big belever in fiscal discipline, but unfortunately, the super-low-tax rates of Greenwich and poor planning have resulted in UNDER-maintained infrastructure and little planning for how to periodically update or replace buildings (they don’t last forever, unfortunately)

    • No, it’s not underspending that’s the problem, it’s overspending, and on the wrong things. If you feel the need to pay higher taxes please do the rest of us a favor and move to Stamford or Bedford: you’ll feel better, and so will we.

  5. Balzac

    The pressures on the RTM and the BET are intense. First Greenwich has to spend what, $20 million on the fire station? It’s public safety, an imperative! Then let’s spend $22 million on our financially challenged nursing home, the Witherell. It’s about the seniors, a moral imperative!. Then $39 million for a high school auditorium and music classrooms, with pollution remediation. It’s about our children, another moral imperative!
    Each project has its intensely motivated backers, who frankly intimidate the RTM and BET. They’d intimidate any of us.

    In contrast to these expensive projects which are important to one group or another, consider the rate of taxes and debt in town, which affect every single resident. Each group of motivated backers seems to go AWOL when it’s time to defend the general interest, rather than the specific.

  6. OG Reader

    “A low property tax and a well-maintained infrastructure is our draw, not new pools.” Well said.

    Town revenue is about $350 million per year. You’d think that we could live with that.

    Debt is a tough genie to put back in the bottle without surprising growth – which is what the town has just come through (see page 12 of http://www.greenwichct.org/upload/medialibrary/c00/Background%202011-12%20Budget.pdf).

  7. Georgie

    “when is the last time the Town spent money on a “luxury” item…and schools, fire stations and police stations don’t count.”

    Is “Just the Facts” referring to Town responsibilities or what a rich Uncle is to a family? Just wondering.

    Well you real estate pro’s….congratulations!…..you can really now jack up those home prices now because you will shortly have a $40 million performance hall to sell as an amenity here in Greenwich.

    And, just hope your tax-soaked NYC or Westchester refugee doesn’t ask about the ever increasing Greenwich rate of taxation and increasing debt that in short amount of time begins to looks just like what they are trying to flee.

    Oh, also I couldn’t help but notice that PARENTS opposing the project kept home as the 50 person strong BOE/PTA/students sold this performance hall project above all else for Greenwich schools today.

  8. CatoRenasci

    The difficulty is the way the RTM has to look at the budget: The officials and the BET prepare it laced with all the goodies, and with the annual increase baked in because the BET has a goal of 2-3% increases in taxes every year. The RTM then has to go through line by line and can only reduce particular lines. Annual increases in labor costs (3/4 + of total spending) are baked in through contracts negotiated under a state scheme designed to ensure the employees always get a raise.

    What needs to happen is the RTM getting ahead of the process and taking a broader view. Instead of starting with the “needs” and annual increases, the RTM and its standing committees interested in the budget should start with the premise that we are not going to spend $1 more in the new operating budget than was spent in the last one.

    Let the administrators in Town Hall and Havemeyer know that they must do the job with the same amount of money. They are supposed to be highly trained and educated professionals. Let them apply their skills to figure out how to accomplish the job without raising costs or taxes. If labor contracts force increases, they they must either renegotiate the contracts or use fewer personnel.

    And, it should be made clear that they had better not come back cutting the most popular programs. Let them know that they can start by cutting administrative personnel and costs.

    Our tax rates are low, but the actual taxes we pay are not nearly as low because our valuations are so high. You shouldn’t compare taxes in Greenwich and (say) Stamford based on the value of a house, rather on a house of similar stature. You would find the differences smaller than looking the difference in taxes on a $1 million house.

    Small increases in pay, benefits, and other costs, and hence in taxes, all add up. In these difficult economic times, our budget should be stable or decreasing, not increasing.

    If MISA is the Town’s highest priority – which it seems to be – then people will have to understand that other projects must wait: the new fire house, a Northwest fire house, new police radios, etc. We cannot do it all without vast tax increases.

    The Democrats in town want to borrow more and more — what happens when rates inevitably rise? Greenwich had one experience with too much debt during the last Great Depression and swore off debt. How soon we forget.

  9. Cos Cobber

    I’m not really against the MISA project per se, but I am against doing the firehouse, nursing home, northwest fire house, byram pool, etc all at once or all in a 3 year span.

  10. Georgie

    Chief Scrotum….that was an incredible article on Montclair. Remarkable, the parallels to Greenwich.

  11. Demmerkrat Patriot

    Everyone was made aware by the BET Chairs, Steve Walko and now Mike Mason, that the GHS project would delay other projects. The electorate (you know, those pesky voters), made it clear to everyone that those delays are acceptable. The new central fire house is already appropriated, so that is in the planning.

    The fiscal policy has two caps: the “debt limit” (finally) and the limitation of pay-as-you-go financing. The former the artificial construct Selectman Marzullo refers to, the latter is written into the town charter. Pay-as-you-go limits our long debt to five years, so the town can’t completely mortgage our future taxpayers. However, pay-as-you-go does limit how much debt can be handled and maintain the 3% yearly tax increase.

    …. start with the premise that we are not going to spend $1 more in the new operating budget than was spent in the last one.

    This is the crux of the matter …. if you tell a department head they will have a 3% budget increase, you can bet they’ll increase their budget 2.9999% every time. I agree …. start with 0% increase, and then justify it. Automatic budgetary increases breed automatic spending whether it is needed or not.

  12. Balzac

    CatoRenasci for first selectman!

  13. Get real

    Luxury is the 150K for life pension we give Chief Ridberg and the upcoming 151 cop pensions to come after they boost their final 3 year salaries. March on town to eliminate these luxuries first.

  14. Cos Cobber

    Agreed Get Real. The overly generous retirement plans and health benefits is the big ugly issue no first selectman seems to want to tackle. The starting pay for these civil service jobs is too low and it they end too high, particularly for retirement calculation purposes.

  15. Georgie

    Balzac….agreed with your sentiment. CatoRenasci did you speak out last night?

  16. dogwalker

    Get real, Sorry, I’m big on keeping one’s word. If people have been employed with the expectation of a certain pension, we have to do our best to honor that, in my view. Changing conditions in the future . . . fine. My first choice would be retirement after only 20 years of service.

  17. AJ

    Greenwich — the next Greece. Only, Greenwich can’t print it’s own money!

  18. anon

    Cops, firemen, and teachers are the protected classes.

  19. CatoRenasci

    Georgie – no, I knew it was a lost cause and didn’t feel like having a go at a windmill. When the notion of postponing MISA first came up — for pretty good reasons — I told anyone who would listen that it was not possible given the constellation which would be arrayed against any delay. The tugs at the heartstrings (complete with Fritz Kreisler tear jerkers) last night and the ‘milk and cookies for the kids’ positioning were revolting, but exactly what I expected. I actually support MISA as long as everyone understands it will crowd things out, or at least push them to the out years — the auditorium and the music classrooms really are a disgrace. I and my kinds have been involved in music here in Town for a long time and we the failings first hand.

    Politics is the art of the possible. There is at least a 2-3 year educational project required by the standing committees concerned with the budget, and probably more problems in the economy, before a broad enough spectrum of Greenwich citizens and taxpayers will be receptive to an argument to really deploy what some people refer to as the “nuclear option” of setting funding and telling the BET and BOE to live within the means the RTM is willing to provide.

    In October 2010, the RTM passed a sense of the meeting resolution to hold the line on spending, but it was ignored.

    The schools are the biggest issue now — they’re really not so very good despite what we spend, and they should be. We haven’t had a good permanent superintendent since Ernie Fleischman retired in 1989. I know most of the men and women who have been on the school board over the past 25 years and like most of them. But, they have done one lousy job collectively. Despite the best of intentions (in most cases) they have presided over the decline of the system from one of the top 10 in the entire country, to one that’s not even in the top 10 in Connecticut. There is far too much educational psychobabble, too much political correctness, and far to little attention to academic excellence, discipline, and a faculty and administration who actively demonstrate the love of learning. Children, regardless of background, are not stupid when it comes to figuring out what adults really care about (as opposed to what they say they want or expect) and the only way we’ll ever have a top notch school system again is when it has leadership which models the urgency of consistent excellence every day. Probably won’t happen.

  20. Hu Nhu?

    ““It is an artificial number that does not take into account the long-term needs of the town,” Marzullo said. “No one has demonstrated whatsoever the positive or negative impact this might have.”

    Bozo the Clown, aka D. Marzullo.

  21. anonymous

    Love Marzullo’s grammar.