Rob Douglas: Will Obama bail out Steamboat?
November 14, 2008
Steamboat Springs — Last Friday, in an effort to assure the country he’ll solve the nation’s fiscal woes, President-elect Barack Obama stated during his first press conference, “Immediately after I become president, I’m going to confront this economic crisis head-on by taking all necessary steps to ease the credit crisis, help hardworking families, and restore growth and prosperity.”
With those words, my unease began.
When a politician promises to take all necessary steps to help and restore anything – watch out.
Still, had Obama stopped with that general statement, it would have left room for hope that our prez-to-be understands what our prez-to-leave doesn’t: The more Washington meddles with this financial storm, the farther we drift from a safe port.
Unfortunately, just like President George W. Bush and his bungling band of bankrupting buffoons, our president-in-waiting believes the government can turn the tide of global markets by spending trillions and grabbing ownership of every company proclaimed “too big to fail” while simultaneously casting aside the proven medicine of moral hazard.
So, Obama didn’t stop with words of assurance.
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Instead, he laid out his recovery blueprint and identified his second priority as addressing “the spreading impact of the financial crisis on the other sectors of our economy (including) state and municipal governments facing devastating budget cuts and tax increases.”
With those words, my unease gave way to trepidation.
Obama believes it a federal responsibility to bail out state and local governments that have overspent and is encouraging them to line up at the federal tax trough to gorge even more.
And, in case there were lingering doubts, when asked what “any president can accomplish during their first hundred days in office to turn the economy around” and what his priorities would be on day one, Obama made the point even more forcefully.
“I think it’s going to be very important for us to provide the kinds of assistance, to state and local governments, to make sure that they don’t compound some of the problems that are already out there, by having to initiate major layoffs or initiate tax increases.”
So, there you have it.
Under an Obama administration, there’ll be no reason for local and state governments to balance budgets through cuts or taxes as most are obligated to do by law or constitution. Just hold out a paw, and Uncle Sam will deliver freshly minted dollars hot from the printing presses.
Evidently, “change” means a new presidential engineer pushing the deficit accelerator harder than the current one. Compounding the problem – with Harry Reid, Nancy Pelosi and Barney Frank all aboard Obama Railways wearing matching blue conductor uniforms – there’ll be no brakeman in red to stop this runaway train.
After listening to the man from Hyde Park, I wondered how long it would take until some official in Steamboat Springs employed his words in an attempt to lighten our fiscal worries.
At Tuesday’s Steamboat Springs City Council meeting, when Finance Director Lisa Rolan was asked if her revenue projection for 2009 is overly optimistic – given the accelerating retraction of the national economy – Obama’s words made it all the way from the podium in the Hilton Chicago to the podium in Citizens Hall.
After joking that the council felt a 4 percent decline in sales tax projection was overly pessimistic earlier in the year and overly optimistic now, Rolan told the council that one reason she feels comfortable with her estimate – one far rosier than most other mountain towns – is that there will be funding opportunities with the new president.
After addressing the council, Rolan confirmed to me that she is “extremely comfortable” with her revenue projections. Further, she stated that she believes as part of Obama’s stimulus plan there will be increased grant opportunities “coming down” and increased federal monies invested in infrastructure.
Putting aside the question of whether grant monies could be used as part of the city operating budget, the difficulty with forecasting one penny of local revenue based upon Obama’s “plan” to flood the nation with deficit dollars is one of timing. There is little chance any federal revenue – no matter how it’s injected into the economy – will make it to city coffers in time to change the outlook for 2009.
When I asked Rolan if she was playing a game of chicken with the council – gambling that they’ll use reserves instead of making politically painful personnel and program cuts next spring if her projections prove incorrect – she said she isn’t gaming the situation and wants to operate the city as a business, provide only core services, and that her “goal is not to hit reserves.”
Time will tell whether Rolan’s optimism – based in part on a gamble that President-elect Obama’s pre-inaugural promises will alleviate the city’s fiscal straits – is well founded. But the council, which has a fiduciary responsibility to city residents, should reject the budget next Tuesday evening and begin again with realistic – not optimistic – revenue projections.
To reach Rob Douglas, e-mail Rob.Douglas@Comcast.net