Talk of the Sound has been sounding the alarm since we first launched in 2008. Few among the New Rochelle Pep Squad have heeded the call. Now the bill is coming due and no amount of cheerleading is going to hold back the oncoming tidal wave of financial ruin. In just a few short years, the United States has gone from the benchmark, risk-free debt standard to a threatened negative outlook being issued by Moody's. A downgrade of U.S. debt will mean the end of the U.S. Dollar as a reserve currency and more broadly the end of the world as American's have come to know it in the Post-World War II Era. All debt in the United States from State to County to Local will be downgraded. Oil, no longer bought and sold in dollars, will become more expensive rippling through our economy making everything more expensive.
Wake up people! The car is not in a ditch, as President Obama kept saying during the recent Congressional elections. We are locked in the trunk with Thelma and Louise at the wheel.
60 Minutes got the bond market's attention this week...
The states have been getting by on billions of dollars in federal stimulus funds, but the day of reckoning is at hand. The debt crisis is already making Wall Street nervous, and some believe that it could derail the recovery, cost a million public employees their jobs and require another big bailout package that no one in Washington wants to talk about.
This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry. Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.
Bloomberg has a story about Westchester County which give New Rochelle residents pause. Look at the increase in pension contributions for the County. Translate that for New Rochelle which has about $10mm in pension contribution payments this year. A similar 50% increase for 2012 would be $15mm or about 13% of this year's budget. For 2015 that would be more than triple of $30 million. This will mean massive property tax increases or the forced sale of assets like buildings, parks and equipment or more layoffs or some combination thereof.
Westchester County, the New York suburb where household income is 53 percent above the U.S. average, wants to use its top credit rating to sell taxable bonds to finance pension contributions and avoid increasing the highest taxes in the country... It faces a $54 million payment to the state retirement plan in 2011, $78 million in 2012 and $163 million in 2015, said County Executive Robert Astorino, who’s working to close a $166 million budget gap next year.
Where will the money come from? In the face of declining personal assets -- home values -- the City and School District keep RAISING taxes...
You might think that with home prices off by 30% or more since the housing/credit bubble popped in 2006, property taxes would have declined by a similar percentage. But you'd be wrong: they've gone up. As if the massive reduction in home equity wasn't enough of a blow to the Middle Class, they're also paying higher property taxes.
Though house prices have declined roughly 30% nationally since the 2006 peak of the housing bubble, property taxes have continued their decade-long rise, jumping $45 billion (over 10%) since 2008.
Rather than confront the problem, the City has engaged in risky debt schemes that even they have said are bad policy...
The Mayor talk[ed] about the hiring freeze, cancelled or deferred non-essential programs, seeking outside grants. While defending the decision this year, the Mayor says City Manager decision to borrow money to pay for the pension increase is "not a good long-term fiscal practice".
The marketplace has already voted on New Rochelle fiscal policy...
The real trainwreck is with the City School District of New Rochelle where a massive gap between property values and the tax rate has become unsustainable...
As usual, the New Rochelle Pep Squad could care less...
Residents might consider how the economy and real estate market have faired since Ms. Schweig, now busy running the New Rochelle Public Library into the ground as a Library Trustee, made her infamous "suck it up" speech in May 2009. Was the economic situation "temporary" as she claimed? Were the projected level of tax certioris even remotely accurate? Has the real estate market rebounded? Unemployment? Taxes? Given how wrong these people have been in the past, why is anyone listening to them anymore?
Happily, last year, the district actually produced a budget that was lower than the year before -- the first time ever since the board was elected rather than appointed.
Sadly, past being prologue, the first Board of Education Community Budget Forum at the New Rochelle High School Library on Thursday February 10, 2011 will be lightly attended and dominated by the vested interests -- school board members, district administrators, union officials and all those who suck off the government teat...people whose primary objective is to grab more and more money for themselves regardless of the fiscal disaster they are inflicting on the rest of the community.
Residents will sit idly by, do nothing throughout the budget process, approve the budget with 15% voter turnout, all while not demanding a residency audit for the hundreds of non-residents who have lied their way into our school system costing residents millions of dollars, not demand the IDA be put under City Council control in order to end the practice of tax abatements for developers who low-ball projections of school-age children that will fill their apartments and condos, continue the lax oversight which allowed district employees to steal what is not nailed down and hire incompetent and unqualified people through the "friends and family" network. The apparatchiks will break out the champagne and issue a press release celebrating how 2,200 out of 75,000 people approving their budget shows that "everyone" supports what they are doing as they rape and pillage New Rochelle like the Mongolian Horde.
People get the government they deserve. So, stay home, It will be cold in February. Don't watch the City Council meetings. Don't hold the IDA accountable. Keep voting in the same school board members for their decades long reign. And then wait for the tax man to come, turn you upside down and shake you until every last dime falls from your pocket.