“Budget Crisis: $4M in cuts looming”, “O’Brien: $30M deficit ‘as plain as day’”, “Mayor’s Office: Won’t use Water Dept. funds again to close deficit”, “Deficit confirmed: Auditor puts it at $9M-13M”, and “Budget Shocker: Mayor says City has $11.5M deficit” are just some of the headlines readers of the Herald have seen over the past year. I imagine many of them were confused the other day when they awoke to see this headline: “New Britain ended 2011-2012 with $105k surplus.”
For those who may have forgotten the timeline of events, here is what transpired. Shortly after taking office the O’Brien administration declared that the city was facing a $11.5M dollar deficit. Former Mayor Stewart claimed that there was no deficit, but that the budget hole should be closed through concession efforts that he was brokering during his final term. After numerous panels and discussions the Common Council voted to borrow money from the water fund by encumbering themselves with a debt previously held by the Water Fund.
At the time there was harsh criticism from several Aldermen and members of the community, myself included. We felt that the actions of the council were being taken hastily and there was no way to predict what, if any, deficit would exist at the close of the fiscal year. This most recent headline proves that we were right.Claiming a “surplus” after raiding the water fund’s piggy bank, regardless of being technically correct, is disingenuous. If I take out a $10,000 car loan and purchase a $9000 car I do not have a $1000 surplus. I have a $10,000 debt.
Claims by the administration that this surplus will come as a sign of relief to the ratings agencies are laughable. Ratings agencies like municipalities who have surpluses and large cash reserves, certainly, but they value stability as well. Over the past year the headlines have been one budget crisis after another, on top of that the City placed the Finance Director Curry on administrative leave with no public explanation. There was even one memorable week where the Mayor’s office simultaneously declared a budget crisis while pledging to not raise taxes next year. These are not headlines that will entice any credit rating agency to give a favorable outlook.
With the pervasive anti-business, anti-tenant mentality of this administration, their constant reliance on “quick fixes,” and their inability to create a budget that can go a single quarter without going in the red I see a rating agency downgrade in our city’s future. I hope for the sake of the entire city that I am wrong.
Note: This originally appeared as a letter to the editor by CPOA President Nicholas Mercier in the October 18, 2012 edition of the New Britain Herald.