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Sacchi says tax increase inevitable

(31 posts)
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  1. JohnM
    Member

    Direct quote from the RCA web site:

    If elected, the RCA slate will:

    Hold the line on property taxes. The RCA slate does not foresee a need to increase property taxes, does not want to raise property taxes, and has no intention of doing so if the slate is elected

    Direct quote from today's Landmark:
    http://rblandmark.com/main.asp?SectionID=1&SubSectionID=1&ArticleID=5433&TM=38799.39

    Sooner or later, however, voters will face another tax increase proposal if they want to avoid service cuts, Sacchi said.

    "It's inevitable if you want to maintain services as they are," Sacchi said. "Our job is to make sure that point in the future is as far as we can make it."

    From the RCA website:

    Between 2001 and 2007, village spending has increased 47%, from $6.95MM to $10.23MM. RCA believes that this skyrocketing spending over such a short period necessitates a top-down, line-by-line budget audit to identify areas of cost savings and better efficiency.

    If elected, the RCA slate will:

    Undertake a top-down budget analysis to identify cost savings — without service cuts — through:
    - A review of both how services are provided and how Village resources are managed.
    - A review of management and support positions to ensure the Village is staffed to support current realities — considering both the residents’ needs and their ability to pay.
    - Perform this review with the goal of providing a better level of services to residents without having to spend more of the village budget.

    From today's Landmark:

    Asked if during his review of the budget Sacchi found areas to economize or pockets of fiscal fat, Sacchi said that he "never expected to find a dramatic pile of money being misspent."

    "The money's been spent," Sacchi said. "We inherited a village with tight fiscal constraints, but thought we could go four years without asking for a tax increase."

    I think a tax increase will be necessary as well. I wonder what the reaction of the RCA faithful will be though. As shown above, the RCA made a lot of promises during the campaign. The problem with promises is that your supporters might expect you to keep them.

    Posted Wednesday Oct 7, 2009 09:28 #

  2. CuriousResident
    Member

    I suspect it will come down to whether "the faithful" are accepting the other quote in the article...or not.

    With respect to Riverside's revenue problem today, Sacchi said that the economic recession was largely to blame.

    "The challenge for us is to explain the reality of what's happened in terms of expected revenue. The challenge chiefly, by far, is attributable to the recession. We had no way of knowing it was going to impact Riverside's revenue stream."

    Reminds me of how (in daily home life) someone can get upset because you said you were going to do "x" and then you don't because of "y". IF they believe "your word" is more important than changing circumstances (and or they don't think the changing circumstances are as significant/real as you do) they are going to be upset. Yet if they simply trust/believe in you, they'll get over it and move on.

    No doubt about it, the other party will see it all about "the word" and do their best to crucify them.

    I understand the ideal of opposing views creating balance in government; I'm just always disappointed in how it typically becomes about polarizing views and vitriol versus making "centered" progress. We are all in this together!

    Posted Wednesday Oct 7, 2009 09:53 #

  3. JohnM
    Member

    Curious,

    I agree. We are all in this together. However, one's word does mean something. Campaign promises mean something.

    First off, I don't think the challenge is "chiefly attributable to the recession." Certainly some of our problems are recession-cased--lost income from investments, less tax money, etc. However, the larger problem is that we spend more than we take in. The RCA ran a campaign that focused on the excess spending as a problem. They constantly promised a "top down" review of the budget to eliminate waste and excessive spending, and claimed--over and over--that our problems were excess spending, not lack of revenue.

    Some of us never bought into this. I can look around the Village and see how leanly staffed it is. I can see how we fail to replenish our tree stock, how broken sidewalks don't get fixed, how weeds grow in our parks, how limited our Rec department is compared to neighboring towns. The RCA promised that they could maintain services while reducing spending and not raising taxes, while ripping into their opponents by portraying them as free-spending and tax-happy. People voted for the RCA based in part on these promises. I, as well as others, believed their approach to the budget was fundamentally unsound--obviously, the majority disagreed.

    The Board has a tough job--I wish them well. I don't want to crucify them, I don't want to be vitriolic. But I'm not going to apologize for saying "I told you so."

    Posted Wednesday Oct 7, 2009 10:24 #

  4. bensells
    Member

    According to Kevin Wachtel, the Village's Finance Director, the amount of the 2009/2010 deficit of over $1 million dollars that is attributable to the economic downturn is $425,000 (this because of decreased revenues). If you adjust for that amount, the Village would still be facing a 2009/2010 deficit in excess of $575,000.

    Although the economic downturn certainly worsened things, it is not accurate to say it caused the deficit. Interim Village Manager Weaver is correct in her comment quoted in the Landmark:

    "There's been a structural deficit for the last five, six years," Weaver said. "It was always getting to this."

    Posted Wednesday Oct 7, 2009 10:39 #

  5. CuriousResident
    Member

    Ok, you said it...and I'll admit that I generally agree with you.

    Now what?

    To me, this line of discussion should be shelved until the next election has started...as it does nothing to move us forward with the situation at hand...beyond feeding vitriol. Just my opinion~

    Posted Wednesday Oct 7, 2009 10:40 #

  6. PAR4
    Member

    What I don't get is that the liason to the Finance Committee seems surprised that a global recession (well under way when they were campaigning and getting elected) would affect our revenue stream? Did they really anticipate it NOT being a problem??

    Posted Wednesday Oct 7, 2009 10:41 #

  7. CuriousResident
    Member

    Ben, I like the way you shed some balance to the discussion...as it is not "the economy is the problem" or "the economy is not the problem"

    By those numbers ~40% of "the problem" is related to the downturn. The economy is not the root cause, but it is a clearly a significant worsening factor.

    If we give Sacchi the benefit of the doubt, when the problem was smaller they thought that they could "make sure that point in the future is as far as we can make it." ...where "that point" is a required tax hike.

    Now if Sacchi and the RCA try to dig in to save face, because "they promised", versus adjusting position for the evolved context...then we all have a much bigger problem.

    Posted Wednesday Oct 7, 2009 10:50 #

  8. TonyM
    Member

    Kudos to Trustee Sacchi for speaking as openly as he did to the Landmark. That truly was a step in the right direction. I would like to reiterate Trustee Sells' comments by saying that the recession only accelerated the financial situation that the Village is facing - it did not create it. The Village has known for years that this day was looming, hence the creation of the Long Term Finance Committee a couple of years ago.

    All of the candidates in the last election sat through a meeting that was conducted by then Village Manage Manager, Katy Rush and Finance Director, Kevin Wachtel. It was very clear to all of us that the Village had serious issues that required serious attention. Some of us accepted and welcomed the challenge, others elected to ignore it because it didn't fit into the "message". Even without the effects of the recession, the Board would still be faced with the challenge of a $500,000 to $600,000 deficit for 2010 with larger deficits in future years.

    I would like take exception with Trustee Sacchi's quote:

    "The money's been spent," Sacchi said. "We inherited a village with tight fiscal constraints, but thought we could go four years without asking for a tax increase."

    Sooner or later, however, voters will face another tax increase proposal if they want to avoid service cuts, Sacchi said.

    "It's inevitable if you want to maintain services as they are," Sacchi said. "Our job is to make sure that point in the future is as far as we can make it."

    I believe that a Trustee's job is to be a responsible, sober steward and to develop a plan to secure the future - not drive the car to the brink and bail. If the Village is allowed to deteriorate to the point of bankruptcy, it will be even more expensive, financially and politically to get things back on track.

    Posted Wednesday Oct 7, 2009 11:29 #

  9. cblackstone
    Member

    As a long time resident of Riverside, I find it refreshing to have two partys at work. It forces everyone to be honest.

    This is how I see it.

    The Caucus backed boards have chose to spend money instead of planning. Like paying consultants to provide zoning which gets shirked with the first variance that comes about, or paying consultants (and accepting a planning document) and then spending over $1/2 Million to assemble lots that are not in the plan. This is spending without thinking. It has been a waste of taxpayer dollars.

    On the otherhand, the RCA has been focused on "No New Taxes." So, they faught against the Tax increase and the TIF. A TIF is a hidden tax increase. So they have not had much time on the board. But at the moment, it appears that they are saving without thinking. And services are on the chopping block.

    Now, we have a board with Caucus spenders and RCA tightwads. And no one thinking. What to do?

    Well, for starters I think it would go a long way for the village if the people on the board quit writing letters to the editor tattling on one another like babies. And for the people that ran and lost, you really appear to be sore losers. John McCain was obviously the best and most experienced candidate in the last presidential campain. He has lost gracefully. Have some self respect.

    Now, it is time for the tightwads and the spenders to start thinking, together.

    Posted Wednesday Oct 7, 2009 12:06 #

  10. spatny
    Member

    Everyone understood we had a structural deficit caused by salaries and prices rising faster than the CPI gave us revenue increases. But recent troughs have aggravated that situation in a way that almost no one saw coming, and it is getting worse. Spending money for real estate we didn't need to acquire, all the other expenses for projects and consultants that didn't pay off, committing us to 80/20% grant projects that weren't entirely necessary and then discovering that they are more like 50/50 and much more expensive than contemplated - all this contributed to the present dilemma. But when faced with the worst economic climate in over half a century it's a little ingenuous to try and blame the people that are coping as best they can. Everyone knows these are perilous times and I'll bet most applaud the efforts to cope. I do. It ain't easy...

    Friends and others - it is going to get a lot worse. I predict the market will have a "major correction" within six months - maybe before the end of the year. And as for residential real estate, here's how I see it....

    "The worst contraction in the housing sector since the Great Depression, now in its fourth year, shows signs of reaching a bottom. Indicators of both demand and supply have posted modest recoveries from the record lows reached in H1 2009, though they remain sharply depressed below historical levels.

    In a recent research note RGE’s Prajakta Bhide and Christian Menegatti provide an assessment of the current condition of the U.S. housing sector and forecast home price dynamics for each of the 10 cities of the S&P/Case-Shiller C-10 index. They also provide nationwide price forecasts. They conclude that some of the improvements registered on the demand side in the recent months might be of a temporary nature and that home prices might fall further in the months ahead."

    I'd wager another 10-15% before this ends... and unemployment above 12% - really 15% if you count it all. And elsewhere worse.

    The times call for more slivovitz!

    Posted Wednesday Oct 7, 2009 12:56 #

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