In one of my first columns, I discussed the importance of financial literacy as a tool to help level the playing field in our community. It was aimed at helping individuals think about how sound financial planning could improve their daily lives and their surroundings. Hopefully, it got through to a few folks and helped them to make some positive changes. I write about the topic again because it is clear the message did not get through to Mount Vernon’s government. We’ve got a fiscal emergency on our hands, and I am not seeing any progress being made to solve it by our elected “leaders.” It’s very simple, really.
If we don’t solve this problem, we can expect some serious financial pain in the next few years.
In that earlier column, I wrote, “if we are going to change our circumstance, we have to change our thinking and educate ourselves. We need to start with the financial basics and understand how to avoid the traps of poor spending habits to better prepare ourselves for wealth creation.” On the government level, that statement is equally applicable. Like any business, a government runs on revenue, which is offset by its expenses. If you spend more, you need to take in more.
Unlike a business, if a government spends more than it makes, it can go to its taxpayers and get more money from them. No one is ever happy paying more taxes, especially when their government cannot control its spending. They shouldn’t be happy; they should be irate. This is why processes and procedures are put in place to protect taxpayer money. They are designed to eliminate and avoid waste and corruption. That is why the structure of the government is set up the way it is – to ensure more than one person is making decisions that impact the government’s coffers.
As the last few years have demonstrated, that system is broken and may require us, as a community, to re-think how our government is structured in the years to come. This current administration has mismanaged the finances of this City that Mount Vernon has effectively no ability to borrow money. Forget bad credit. Where we are is worse. We’ve got no credit. Our spending is completely out of line with our revenue and the Mayor’s most recent budget proposal actually makes it worse, not better. “Money Earnin’ Mount Vernon” has become, under Mayor Thomas, “Money Burnin’ Mount Vernon.”
The anticipated revenue numbers in Mayor Thomas’ proposed budget are a complete fiction. More like bad science fiction, really. There is no support for many of the numbers whatsoever, basic calculation mistakes, and a general sense that the City will simply add more revenue from things like tickets, parking fees, and licenses (all of which are just “shadow taxes” on the people of Mount Vernon). The single largest revenue item (almost 40%) in the budget is sales and use tax. For that number to be remotely real, consumers would need to spend over $500 million this year in Mount Vernon. While I would love to see that happen, the reality is it is not going to happen. He’s added $1.25 million in new parking fees and fines (a 56% increase), $300,000 in new police tickets (a 43% increase), and $650,000 in additional real estate transfer taxes (a 35% increase). That’s just a few of the ways he’s inflating revenue numbers this year.
Why would the Mayor inflate revenue numbers? So that he can increase spending, of course. Which is exactly what he’s done. He’s increased it by over $5 million this year alone. Mayor Thomas’ spending proposal shows a complete and utter lack of fiscal discipline. And, worse, his spending numbers do not account for items which are “off the books” and not part of the budget – numbers which the City still needs to pay for (or has already paid for).
What are these “off the book” items? There’s a massive $4.5 million judgment from the Key Food supermarket lawsuit which was just paid. That’s not in the budget anywhere. An entire column could be devoted to the legal incompetence and blundering decision-making that went into producing that result (one that could have been easily avoided), but suffice it to say that it is now money out the door. Add another $2+ million to outside lawyers retained by the Mayor’s office and Corporation Counsel that was just agreed to be paid out (only a bit more than $200,000 was in the budget for such services). That’s almost $7 million that’s leaving the City’s bank account without any offsetting spending reductions. When added to the $5 million in new spending, the City is almost $12 million in the hole, before we’ve finalized a budget or issued a single tax bill.
There’s more out there, too. That’s just the tip of the iceberg. If you ran your household or your business like this, you’d be out on the street by now. It’s irresponsible, unsustainable, and, frankly, criminal. This City is getting fleeced by its own government, and there’s no words to describe it other than shameful.
Who’s supposed to be watching the books? The Comptroller, of course. While dealing with this Mayor has been understandably difficult, can the City Council get numbers out of the Comptroller’s office so that we can address this budget mess accordingly? Of course not. There’s plenty of excuses, we’ve heard, but, in reality, there’s no excuse. The Comptroller must supply us with the necessary information to make legislative decisions. If we only have the Mayor’s fantastical budget projections to go on, we’re sunk. The City Council, in the middle of the budget approval process, was not even informed the Comptroller was going to make those unbudgeted $7 million in payments until after they happened. That’s just insane.
I am going to be discussing this a lot more in the coming days, but I wanted to make sure you understand the severity of the problem we’re dealing with. If this continues, Mount Vernon is headed for an unavoidable and embarrassing bankruptcy – as soon as this year. The people of this City deserve better stewards of their tax money and more responsible leaders in City Hall. It’s time to stop making excuses for the financially illiterate “leaders” who are running Mount Vernon into the ground.
If you have thoughts or comments about this issue or any other, reach out to me at ADWCMV@gmail.com.