Sunday, January 07, 2007

The Council and the Springfield Paradox...

As the city awaits word from Governor Deval Patrick about the future of the Control Board, questions about the city's future persist. Despite almost balancing the budget, (which would be balanced were it not for the legal black hole of the trash fee) Phil Puccia himself admitted at FY2007 budget meetings that future budgets could be troubled. Granted this was before contracts were settled with the Big Three (Police, Fire, Teachers). Concerns mount in Boston, Springfield's suburbs, and the city itself as to whether the City Council is prepared to resume its duties. A number of the current councilors were present during the period that led to today's crisis. Would an equally irresponsible city council bring on a relapse of fiscal malaise? After all had the Council done its job, Springfield, MA would not be in this situation. Or would it?

Anybody who has read WMassP&I should know that I hold the city council accountable in part for the current situation. This position is unchanged. They failed to direct fund into capital maintenance, which would have been cheaper a decade ago. They approved sweetheart union deals that necessitated the austere contracts now in force. Spending exceeded overall revenue recklessly, with the council knowing full well that revenue growth was predetermined a la Proposition 2½. But this alone does not account for the city's wider and longer term fiscal issues.

The city's current revenue issues run deeper than Proposition 2½. Two and a half plays a larger role in the future. Even under the rosiest of projections, with a significant portion of the city's undervalued real estate going up, revenue growth is flat. In fact, under that situation, barring an override, the city's fiscal standing would worsen. Enter the Springfield paradox.

Rising property values, among residences at least, suggest rising demand. Owning a home, even in Springfield, amidst rising prices is not cheap. Whether its the poor rising into the middle class, renters finding themselves able to buy, or urban pioneers, it will alter the city's economic demographics. Unfortunately most state aid, the largest piece being school aid is calculated based on the community's poverty. Sadly, Springfield ranks high on that list now. But, if it were to drop, it could lose state aid. Hence, the problem. With the school department taking up more than half of the municipal budget, and only 10% of that number being from city funds, losses could be steep and impact widespread.

If the school department could bear such a loss, maybe the city might have an excuse, in the eyes of Beacon Hill's powers that be, to get a boost in "additional assistance." That cash could then be directed to other areas. Additional aid would be the only way to redirect money present or future as school aid is specified by the state as to where it goes.

Who knows? Maybe if real estate prices improve (in all neighborhoods, not just the middle class ones) residents will approve an override. Maybe some new development will be spurred in the city. Either way, the Council's timeout is not ready to be ended. If it is, hopefully, under Kateri Walsh's leadership, they will be a more judicious and prudent council than in years past. Rather than castigating the Control Board's work, they will adopt the positives and leave a legacy that future political generations will be proud to inherit.

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