For anyone over 35, you are probably familiar with Popeye and Wimpy. Wimpy has a penchant for hamburgers, but never has enough money to afford them. His famous line, “I’ll gladly pay you Tuesday for a hamburger today,” is equally applicable to the way Annapolis seems to be handling their finances.
The budget and the deficit has been a moving target for many months and has ranged from $3 million to $13 million. The City has laid off 33 employees, supposedly cut expenses, eliminated positions, and borrowed $10 million in order to assure they could make payroll for May 2010. Two weeks ago, the word came out that there was yet another cash crunch and that there would be a $4 million deficit by the end of the first fiscal quarter. However, Finance Director, Tim Elliott, was confident that the tax receipts due in October would rectify the situation. October is a magical month. It is also the time when the $10 million loan was to be repaid.
Now it seems like Mayor Cohen and his Finance Director may have missed the mark and are asking to borrow another $10 million for a total of $20 million. Borrowing is not the answer here. $20 million represents more than 25% of the City’s total budget.
We are not sure of the terms on the Bank of America loans for $10 million, but it is very plausible that they have mandated a tax increase if the City does not meet it’s obligations in a timely manner or if Bank of America feels that it is in THEIR best interest to force the City’s hand.
Take a look at this re-make of Popeye and Wimpy and see if there might not be some parallels.