Montco Forsees Increased Borrowing

Tighten your belts, Montco taxpayers...it won't be long before we see our first tax increase under the new, democratic administration!

Read the article by Bradley Vasoli, Bulletin Columnist:

08/11/2008

Norristown - A report on Montgomery County's general fund shows a fiscal outlook at the midpoint of the year slightly weaker than at the same point last year, although the county's solvency remains relatively sound.

County revenues in the first half of 2008 minus expenditures during that period amount to $60,767,000. The figure for last year's midpoint was $81,843,000.

The changed fiscal picture owes partly to lower real-estate tax receipts and to a $10 million increase in spending for the first half of the year.

Maintaining a hefty fund balance has long helped Montgomery County maintain an AAA bond rating from its financial management company Moody's Investor Service. All three county commissioners agreed they would not support a tax increase at this point to shore up the balance.

"All of us agree: All we have to do is not have one," Commissioner Bruce Castor, R, said.

Commissioners' Chairman Jim Matthews, R, said a likely response would be to increase long-term borrowing, which he said makes sense in a time like now when interests rates are low and the Federal Reserve seems more intent on maintaining economic growth than preventing heightened inflation.

"[Borrowing] is a long-accepted method of dealing with long-term costs," Mr. Matthews said.

Mr. Castor said after the meeting he is reluctant to look toward borrowing because of the future financial burden to which increased debt service would lead. (click on link to read the entire article)

He said he feared much of the money the county spent in the last six months hasn't been appropriated wisely. He criticized particularly what he views as excessive salaries paid to several friends of Democratic Commissioner Joseph Hoeffel who are also former candidates for local and state offices.

He cited Jeff Albert and Jim Maza, hired in January respectively as first assistant deputy solicitor and deputy county operating officer. Both make slightly over $90,000.

"I get the sense that there's no [fiscal] restraint at all from the commissioners," Mr. Castor said.

Republicans also took some criticism from Mr. Hoeffel for their stewardship of the county's finances before January. (Since that time, a bipartisan power-sharing arrangement between Mr. Hoeffel and Mr. Matthews has been in effect.) Mr. Hoeffel criticized Republican former Commissioners Chairman Tom Ellis for supporting an interest-rate swap that did not realize the savings for the county Mr. Ellis anticipated.

Mr. Ellis, a state treasurer candidate who attended the commissioners meeting to discuss campaign finance reform proposals, responded that he, Mr. Matthews and Democratic Commissioner Ruth Damsker agreed last year that opting for a variable interest rate was the best decision based on the economic outlook at the time.

He also credited himself with helping the county save $29 million during his three years as a commissioner.

Mr. Hoeffel disputed neither point.

"I understand that the market went south," he said. "I simply want an honest accounting."

He went on to give Mr. Ellis some praise for his economic record.

"There were millions of dollars of savings as a result of your work," Mr. Hoeffel said.