City moves closer to Tier IV in ‘clinical’ analysis by panel
The question of whether the City of West Haven will be put under “Tier IV” interdict by the Municipal Accountability Review Board moved a step closer to reality last week with the revelation by members they were “leaning” that way. At issue is the five-year plan that the city is trying to cobble together in order to present a better fiscal reality.
The proximate cause of the five-year plan’s failure thus far is the city’s pension responsibilities that are grossly underfunded. In fact, one member of the panel failed to see how the city ever gets out of the situation, even if Tier IV is imposed. Both the City of West Haven’s Fire Dept. – Allingtown and its other pension and post-employment accounts are underfunded more than $160 million.
Those who have watched the budgeting of the city over the last three decades know that pension funding has been a problem – a big problem – for decades. In fact, more than a decade ago, the city bonded to fully fund its pensions, reneging on a promise to fully fund those accounts after the bonding was approved.
Over the years, the issue was put on the back burner. Now that the city put itself under the review of the MARB, every jot and tittle of the city’s finances is under scrutiny, and every facet of the budget accounts have to be brought up to funding. The short-term benefit of bonding to eliminate the deficit means the taxpayers of the city will be asked – eventually – to pony up more taxes in order to balance the accounts. The Law of Unintended Consequences can never be repealed, indeed.
One member of the panel opined the taxpayers of the city should be brought up to speed on the dire situation to understand what is at stake. What that member doesn’t seem to understand is the taxpayers are well aware of the situation, but tapped out as to the amount of taxes they are able to afford.
While it is all well and good for a panel of experts to be clinical in its assessment of what needs to be done, there is little humanity in that assessment. The city is between the proverbial rock and hard place. Raising taxes will further erode the tax base as people who can leave will. Industrial and commercial development is at a stand-still, and has been for almost two generations, and even projects like “the Haven” will not generate the tax revenue that will bring us to the Promised Land of solvency.
The problems facing the city have been 30 years in the making and a five-year plan is not going to solve it, no matter what the panel of experts thinks. The problem is Tier IV status will put the panel in the driver’s seat regarding our finances, and it will impose those remedies it thinks necessary, regardless of the impact it will have on the residents. It’s always easier to be dispassionate when one is not the subject being discussed.
We are afraid the pain felt so far with budget and personnel cuts are nothing compared to what will be imposed over the next little while. We believe Tier IV status – and with it loss of local control – is inevitable. We have a situation where the shots are being called by a group of experts who see nothing more than a problem to be solved. They fail to see that people – real people – are affected by their decisions.
The irony is not lost that a panel of the State of Connecticut – one of the poorest run and most debt-ridden in the Union – is telling a small, seaside town to get its act together.
The further irony is that the state is laden down with millions of dollars in unfunded liabilities of its own in the form of pensions the state itself has left with incomplete budgeting.
We fully understand the need for the city to shore up its expenses and find new sources of continual revenue, but the clinical way the MARB is handling the situation is not taking a common sense approach. The city will need time — maybe more than five years even by some member’s reckoning — to get out of this fiscal hole. It will take an incremental approach that allows taxpayers — those who remain — to pay the bills.
This “bean counter” approach by some members of the MARB and their ham-handed way of characterising our difficulties are not helpful, and may be detrimental in the long run. The city needs tough love, yes, but it also needs understanding for those who must pay the debt.