Word of the Day: REVENUES

Fellow Historics:

Annapolis is filled with many smart people. Our dear friend Greg Stiverson likes to say Annapolis has more smart people per square foot than any other citte in America.

So what happened with Ald. Ross Arnett's special finance advisory committee report Monday night?

Senior experienced managers who have a track record with budgeting and expenses carefully examined the budget. And they made observations and conclusions about city spending that few without a detailed knowledge of the budget could find fault with. In all likelihood, they got it right.

Or, more precisely, half of it right.

In budgeting, COSTS = REVENUES (or so my trustee insists). So they looked intently at the left side of the equation without any apparent consideration of the right.

The problem is that the so-called budget 'crisis' is not being driven by a change in costs (Josh Cohen's proposed spending is virtually the same as Ellen Moyer's). Rather by a reduction in revenues to the City.

Annapolis is apparently not completely immune from the global economy. Tax revenues are down as is our share of gas taxes that fund transportation. And, more significantly, the grant revenues from the Feds, the State and many other sources are down.

Most disturbing is the drop in grant revenues. Grants are discretionary sources of revenue. You have to find them, apply for them and then administer them. They do not come automatically, they require management and work.

The City has done a poor job in maintaining this critical source of revenue, losing some, bobbling others and just losing track of many due to staff turmoil.

We know that the Federal Waterway Improvement grant of $250,000 has been lost, that MTA grants are gone or not applied for, other cultural grants have been dropped (e.g., The Big Read Grant), Federal stimulus monies for the Markethouse mysteriously lost and many others (see: Let's Get Fiscal, 4 March). And, interestingly, all lawsuits have been dropped against contractors who cost the City millions on the police department construction.

The expectations for the economy are bullish and Obama-nomics is now working. Wall Street and the stock markets have definitively answered 'yes' to these questions. In an informal poll of 5 ABA members, all report stable or improving sales in the first quarter. Which means the City's share of this tax pie will rebound.

It's a classic move to hide a political agenda behind a 'crisis'. Things that are either impossible to reach a political consensus on (e.g., shutting down the city bus system) can be achieved through fiscal manipulation by ideologues. (Read Namoi Klien's NYT best seller Shock Doctrine for this technique used on a larger, global scale.)

And so we heard alarming language Monday night. Shortfalls, deficits and a 'crisis'. A 'crisis' that requires us to cut the fundamental services of City government. Protecting people, neighborhoods and our environment.

Without criticizing any one individual, this committee represented a group of people with a deep experience in dealing with costs, but not revenues. None ran businesses that were dependent on multiple sources of income. None were responsible for multiple grants. And none seemed to express any sensitivity to the fact that revenues are dynamic.

They go down. And they go back up.

So what is Ald. Arnett's agenda in talking only about costs and not about revenues? Does he want to strangle the City of its financial resources?

King of George