Op-Ed: Greenwich 'Budget-Cutters Are Back With a Vengeance'

The high water mark of “kill the beast”, anti-government, slash taxes activism was two years ago in the RTM — or so I thought. At that time a sense of the meeting resolution (SOMR) was passed calling for a reduced budget. I spoke against the “motherhood and apple pie” motion for it represented nothing less than an evisceration of town services and our public education system. The motion passed but a few months later a “level services” budget was nevertheless adopted and  budgets since then have reflected a consensus among  all parties:  selectmen, BET and the RTM (at least the majority.) They all seemed to have accepted a continuation of Greenwich’s budget model and the level of service delivery currently in place.

So I thought that the budget cutters had gone away but to my dismay they are back and this time they have invaded the BET. The chair of the BET’s budget committee and lead budget-cutter has written a set of guidelines proposing a 2% budget increase and an overall budget cap of $340 million. This is a dry subject but for the benefit of those who (understandably) don’t follow these matters too closely, this increase will actually result in a reduction in town services due to built-in contractual and fix charge increases in, for example, pension and health care costs.

And in Monday night’s full BET meeting, in an unprecedented 6-6 split, resolved only by the Republican chair’s casting vote, it became clear that the budget cutters are back with a vengeance.

What does this all mean? “Reduction in town services” seems a relatively anodyne phrase but let’s be clear, it is a radical departure from the level services consensus and in the real world it will mean layoffs in town departments and poorer service delivery to residents. This attitude by Republican members of the BET is dangerous and hardly conducive to high morale in town hall. What’s more it is totally unnecessary.

 What is the impetus for this radicalism? The budget guidelines passed this evening say that we are in the “fifth year of a recession,” that a “severe recession has gripped our nation since 2008” and that the budget needs to take account of prevailing economic conditions. I agree with the last point; we cannot be immune from the rest of the world. For example, when the crisis hit in 2008 the town responded at that time with layoffs. They were not well handled but that they were needed was the reluctant consensus. By the time I spoke against the SOMR in 2009 the crisis had passed and we had enjoyed two quarters of positive economic growth. Since then we have had fourteen quarters of economic growth; slower growth than we would all wish but growth nevertheless. We are quite simply not in the fifth year of a recession. To say otherwise is economic illiteracy. Furthermore the IMF is forecasting four years of continuing improvement for the US economy. The mischaracterizations in the guidelines cannot go uncorrected. They are flat out wrong and provide no justification whatsoever for budget cuts.

The fact of the matter is that our taxes and debt are already the lowest of any comparable gold coast town. It could be argued that we pay a price for this and that school standards and in some cases poorly maintained school facilities and public buildings are the result. Let us never forget that we are in competition with neighboring towns and that families looking to settle in the general area look not just to low and predictable taxes but also to the standard of the public schools and the general quality of life. That said I am absolutely not arguing for tax increases above those needed to maintain level services. But I am arguing against cuts that represent a radical deviation from the practices of the past few years and that would take us from fiscal conservatism to fiscal destruction. There is just no need for it.

Let me make two other points. I am clearly a believer in government as our friend but I also believe in efficient government and studies should continue to find ways to improve productivity. That is not the same at all as imposing caps and asking departments to cut back. Finally the BET really does have to reconsider the financing policy for major capital projects. As a finance professional I have always matched financing against the life of the project. That means using longer term bonds, which will spread the cost of, for example MISA or a new town pool or a King Street fire station over all the generations who will benefit from these new amenities. Mirabile dictu it also means that our taxes will be lower because we won’t be cramming project costs into near term budgets. And if there was ever a time to take advantage of historically low interest rates it is now.

But back to the budget process. I called recently for the BET to show the flexibility needed to maintain level services and the vision to adopt a modern financing policy. They have failed, thanks to the Republican budget-cutters. To repeat: there is nothing in the current economy or in comparisons with other towns that warrants the draconian cuts implied by these newly adopted guidelines. The consensus of the past few years is not perfect but it’s better than any alternative that I have seen. The consensus no longer exists on the BET. In fact the BET has rendered itself irrelevant. It will now be up to town departments, the First Selectman, the BOE and the RTM to show the leadership needed to give us a budget that better balances our natural frugality and the need to preserve town services.

 John Blankley