The fiscal crisis club has a new member: the City of Harrisburg, Pennsylvania. Faced with staggering debt payments it simply can’t afford, the capital city is weighing its options. And none of them are particularly pleasant. Does the city file for bankruptcy? Does it make use of Pennsylvania’s Act 47 fiscal emergency program and avail itself of state oversight? Does it raise the property tax levy to an unimaginable level to resolve its structural budget gap?
The unfortunate reality is that Harrisburg isn’t alone. Hardly. Local governments across the country, many of which were struggling long before the economy collapsed, have witnessed their fiscal wherewithal stripped to the bones in the past year. Just Google “city fiscal emergency” and watch the lights dim as you click the search button. Los Angeles has proposed closing all non-public safety operations two days per week. The word “receivership” has been uttered in Detroit and Toledo. And layoffs and programmatic cuts are pending in cities from coast to coast.
Reaction to CGR’s survey on mayoral control, conducted with partner Metrix Matrix Inc (MMI), has reinforced what the survey revealed: Our community cares deeply about this issue and the education of our city’s children. The only prior test of community sentiment was a relatively small telephone survey of parents. Yet parents-to-be, grandparents, resident property owners, renters, and resident business owners all have a stake in the effectiveness of the schools. And all can vote in Board of Education and mayoral elections.
My Chicago-area brother & I engage in a friendly competition over whose political culture is more entertaining. It is a contest I would like to lose, although my hopes have been dashed in recent months. Even with former governor Rod Blagojevich competing in the new season of The Apprentice (begins Sunday!), New York is winning handily. The best capsule summary goes to Baruch’s Doug Muzio who dubbed New York politics “Rod Serling meets Lewis Carroll.”
The financial problems of the nation and many large states—California, Illinois, New Jersey and certainly New York—present a problem that is challenging economically and hazardous politically. Since it’s impossible to separate the economics from the politics, it is truly a Gordian knot – rather than untying the knot, Alexander the Great sliced the Gordian knot in two with a single, bold stroke of his sword.
The Congressional Budget Office forecasts the federal deficit to decline from about $1.5 trillion in 2009 to $608 billion in 2014, then rise to nearly $800 billion in 2020. This is a hefty deficit, particularly when you consider that we had a surplus as recently as 2000. Then consider that the cumulative public debt, which currently stands at $7.5 trillion, is expected to nearly double by 2020 to $14 trillion.
The Center for Governmental Research has begun a partnership with the Rochester City School District. We’ve been invited to support implementation of Superintendent Jean-Claude Brizard’s Five Year Strategic Plan.
I’m a planning skeptic. Often the process of planning is so exhausting that we declare, “It’s done!” when the ink is dry. We forget that the plan serves only to lay out the course and load the starter pistol. The plan is too-often ignored. We continue going about our tasks as though nothing had changed. To the Superintendent’s credit, many of plan’s strategies codify activities already underway. In fact, the first of the five years was 2008-09. Like all good leaders, Brizard is impatient about his plan.
Early this year I wrote about the high deductible health plan (HDHP) and health savings account (HSA) being offered to CGR by Excellus. A look-back seems timely.
Five of us at CGR signed up for the HDHP and HSA combination. With our experience as background, nearly the entire staff selected this option for the coming year. Why?
In this column, we address the challenge of expanding health insurance coverage. First, we explore why our employer-based system leaves gaps in coverage, even for people with jobs. Second, we discuss the challenge of relying on the individual insurance market, which has to fill these gaps.
New York swept the annual property tax competitions sponsored by the Census Bureau. Scored by the Tax Foundation, New York counties dominated the competition in the “property tax as a share of median home value” event, capturing all of the top ten places. Camden, New Jersey was pushed off the top ten after a spirited showing from New York’s Chemung County. Newcomer to the Top Ten, Chemung ranked #16 in 2007.
In the “property tax per dwelling” event, New York’s perennial champions, Nassau and Westchester counties, took the top two spots with Rockland and Putnam counties also placing. The remainder of the Top Ten was dominated by New Jersey, always a contender in the nation’s tax competition.
What a contest to win! Is there hope of ever losing this competition? What must we do to cut the cost of state and local government? Does it matter?
Remember “mutual assured destruction?” MAD was the dominant principle of the Cold War: The Soviet Union would not attack us as long as we retained the ability to retaliate. They might surprise us and obliterate New York, Chicago, Los Angeles, and Washington, but our nuclear subs and hardened silo-based missiles would respond in kind, turning Moscow, Leningrad, Kiev and Vladivostok into historical footnotes (if mankind survived to write any more history).
A kind of financial “MAD” became our consolation in the 1990s as China continued to accumulate foreign exchange, the vast majority of which was in dollars (or financial assets like bonds that were priced in dollars). At present, China’s holdings of dollar assets top $1.5 trillion, says the Peterson Institute for International Economics.
I sent my Nissan Quest to the crusher for a lousy $4,500. Yes, I could see into the engine compartment without opening the hood—but it ran like a top! Now the feds will have their way with my car. Some minion will replace its engine oil with sodium silicate and fire up the unsuspecting engine—until it seizes up, never to run again. It’s the automotive equivalent of “hung from the neck until dead.” What have I done?
As cars fly out of the showroom and the dealerships are clogged with eager buyers, many of us are questioning this bit of Washington wisdom.
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The fiscal crisis club has a new member: the City of Harrisburg, Pennsylvania. Faced with staggering debt payments it simply can’t afford, the capital city is weighing its options. And none of them are particularly pleasant. Does the city file for bankruptcy? Does it make use of Pennsylvania’s Act 47 fiscal emergency program and avail itself of state oversight? Does it raise the property tax levy to an unimaginable level to resolve its structural budget gap?
Reaction to CGR’s survey on mayoral control, conducted with partner Metrix Matrix Inc (MMI), has reinforced what the survey revealed: Our community cares deeply about this issue and the education of our city’s children. The only prior test of community sentiment was a relatively small telephone survey of parents. Yet parents-to-be, grandparents, resident property owners, renters, and resident business owners all have a stake in the effectiveness of the schools. And all can vote in Board of Education and mayoral elections.