Tuesday, September 29, 2009

LC Exec Race: Ott Takes a Shot at Cunningham

Lehigh County Exec candidate Scott Ott took a few shots at incumbent Don Cunningham yesterday, with a robocall claiming that spendthrift Cunningham has depleted the cash reserve. Only he can prevent a certain tax increase next year. But is he right?

Below is the text of Ott's message. If you'd prefer Scott's truly melodious radio voice, you should be able to listen to an audio of his robocall here. I've concluded that Scott is mostly mistaken. As a matter of full disclosure, you should know that I support Cunningham.

Your Lehigh County taxes will jump in 2011 but you have the power to stop the looming property tax hike. Go to votescott.org right now. Lehigh County Executive Don Cunningham spent all of the county’s reserve funds and his new budget is nearly 20 million out of balance. Our property taxes will jump if you do nothing. Go to votescott.org. That’s votescott.org. My name is Scott Ott, candidate for Lehigh County executive. I wrote this message and my campaign paid for it. Thanks for listening.

1. Has Cunningham spent all of the county's reserve funds? No. If he did, he'd be in jail. A reserve fund, as explained by the Governmental Accounting Standards Board, refers to monies that are legally restricted for a particular purpose, such as state grants that must be used for specified human services.

2. Has Cunningham spent all of the county's unreserved funds? No. Cunningham's predecessor, Jane Ervin, imposed a 70% tax hike that turned out to be totally out of whack with Lehigh County's needs. She established two accounts for this excess money - a $28 million tax relief fund and a $20 million tax stabilization fund. The tax relief fund was established specifically to avoid tax increases when spending exceeds revenue. Cunningham actually contributed to that balance when times were good. Now he is exhausting that fund when times are bad, exactly as contemplated when the tax relief fund was first established.

The $20 million tax stabilization fund, or rainy day account, remains untouched.

3. Is the new budget nearly $20 million out of balance? Yes. The 2010 budget shows estimated tax revenue of about $91 million, but spending is at $110 million. That's why the Tax Relief Fund was exhausted.

4. Will there be a tax hike next year? Although Ott is no fortune teller, that seems like a safe bet. It is highly unlikely that revenues will match spending, even with draconian cuts. Cunningham has already reduced personnel to its lowest level since 1990, at about 2200 employees. Before he became County Exec, Lehigh County was actually on track to have over 2500 employees this year.

5. Can Scott Ott prevent a tax hike? No. I called Scott about his robocall this evening. He told me his three-point plan, spelled out on his web page, consists of (1) zero-based budgeting, (2) accountable leaders and (3) independence from state funding.

So far as I know, both Lehigh and Northampton Counties start each year's budget from the ground up. Some departments may get less while others get more. It also appears that Cunningham's staff, which has kept employment at its lowest level since 1990, is already accountable. Finally, I understand Ott's personal disdain for state funding. I get it. But it's really dangerous when it comes to county government.

Ott correctly notes that "Lehigh County's dependency on state funding [has grown] by about $35 million to a total of more than $305 million." But what he seems to miss is that this funding is for mandatory human services. If Lehigh County turns its nose up and sends the money back, it still has to supply the services. That would mean a Scott Ott tax increase in the vicinity of 400%.

Scott Ott? Not.
Update: As a point of clarification, I should note that Cunningham considers the $28 million tax stabilization fund a true rainy day fund. It is off the table for purposes of balancing a budget, including next year's budget.

27 comments:

Anonymous said...

He spent every penny he was legally permitted to spend in order to avoid a terribly embarrassing whopper of a tax increase that he'll break our backs with next year.

You're spinning for your friend.

The rest of the points look to be dead on as well.

Ott is factual. Don's a slimy political opportunist who has no concern for those who don't have Don's money to cover his deferred tax bill.

All politicians using robocalls should be tortured and executed.

Anonymous said...

I believe the career politicain.

Allentown Democrat Voter

Anonymous said...

Ott has no clue about the budget- he should read the laws that mandate the county to provide human services. In some instances, if the county fails to provide the services, the state can step in and do so, charging the county and adding a surcharge.

It would also be interesting to see how he would deal with the unions- and how he would handle a binding arbitration award for the prison or the courts.

Unfortunately, because of the way the system is set up by the state, some costs you cannot easily control in county government.

Ott should run against his local state rep if he wants to bring about change.

michael molovinsky said...

anon 7:25, Don dealt with the union by opening the basement door at cedarbrook, before cardcheck even became a proposal.

Anonymous said...

Maybe Ott's super secret intent is to first refuse the funding, then tell the state to stick their mandates up their big, fat gimmecrat asses.

Chaos would ensue. After some court orders, which hopefully Ott would simply toss in the fireplace, Spendell would send in the force of overpaid donut eaters and we'd have us a Gen-u-wine revolt. Pitchforks and shotguns!

History would record it as the ScrappleFace Rebellion.

Bernie O'Hare said...

"Ott is factual. Don's a slimy political opportunist ..."

Actually, Don's not the person on the attack. He's not the person making this robocall.

The purpose of my post is to question Ott and on the facts. Whether we have a tax increase next year is not something factuial, but a prediction. Ott is correct when he claims LC spends more than it takes in. But he pretty much has everything else wrong. He claims Cunningham sopent all the reserve funds, not understanding that Cunningham can't technically spend reserve funds. Ott means the unreserved funds. But even there he is wrong. A $20 MM tax stabilization fund is untouched. The tax relief fund was spent, but that' why it is there.

I also don't see his plan to avoid a tax increase as working. Most LC department heads who work for the county are already accountable or they do not remain department heads for long.

Zero-based budgeting sounds great, but Ott just seems not to get that nearly 80% of the budget is already dictated by the state. Neary 2/3 of the budget pays for the back end of crime. It doesn't really matter what accounting method you use.

The notion of rejecting state money is all wrong. Ott paints Cunningham as going to H-burg with his hat out. That simply does not happen. LC gets no more money than any other county. Most of what it does get is for mandated services.

Bernie O'Hare said...

"Ott should run against his local state rep if he wants to bring about change."

This is what I think. Most of his beefs are with the state, not Cunningham. His web page has claims about "living the freedom" and "freedom maxims." He even has a quote about illegal immigration.

This is county government, not the Continental Congress. A libertarian or conservative ideology means very little on the county level.

But it's nice he's running. He gives voters a choice.

Bernie O'Hare said...

"All politicians using robocalls should be tortured and executed."

I think a positive robocall the week before the campaign,reminding people about the election and asking them to think of the caller, is fine. That might help.

But I don't think a negative robocall a month before election time does much except to hurt Ott. If you listen to his 30 second message, he sounds more like a car salesman than a person who utters "freedom maxims."

Anonymous said...

Whose district does Ott live in? There is no record of property ownership in Lehigh County.

Alan Earnshaw said...

The Lehigh County web site lists each candidate's address. Scott Ott's is listed as 7572 Sigmund Rd., Zionsville, PA 18092. County assessment records list the owner of that address as "BIBLE FELLOWSHIP CHURCH INC".

Bernie O'Hare said...

Thank you, Alan. I am sometimes attacked because I am not a member of the landed gentry myself, but last time I checked, even renters have the right to seek public office in this country. I would not hold this against Scott, and I know that you do not. I am more concerned about Scott's stands on the issues than whether he lives in a mansion.

not so casual observer said...

It is not necessary to own land to run for office, those days are long gone.

If you think that Ott's arguments are with the state then look to the puppetry of the PA Democrat machine. Rendell pulls the strings on both Cunningham and Callahan, and many others acrosss the state. Rendell's fiscal policies are a disaster and Cunningham's policies are a direct relection of those Rendell fiscal disasters, hence the need for tax increases

Anonymous said...

Not so casual,

What Ott is complaining about has been in effect long before Rendell or Cunningham came into office. He's whining about something that is absolutely not in the hands of the Executive. Anon 7:25 is correct: Ott is running for the wrong office.

I would also like to ask Mr. Ott this: Would you rather Don:

1.Raise taxes THIS year - in the midst of a finacial crisis or

2.Cut funding for programs that will cost people jobs in the midst of the worst financial crisis we've ever seen?

Is it not better to use the resources available - for this VERY purpose - to take us through this crisis and then reassess the situation next year, when things may be brighter?

Ott seems to be at a loss to find solid reasoning to criticize the Executive on a tangible issue and bases his criticism on a "doom and gloom" potential crisis...which may or may not happen.

The average voter doesn't care about a hypothetical situation that might not affect them next year, they are only interested in right now.

Anonymous said...

Bernie,

Ken Petrini here (can't remember my log in)

At least Scott has answered the question of how he will balance the budget (tax increases, although I expect spending cuts as well). Don's campaign has not answered my challenge question yet as to how they will bridge a gap (and my question assumes there will be one) with tax increases or spending cuts. I do believe the 2 candidates and all 10 commissioner candidates should answer.

Great article, by the way. I hung up on robocall so I didn't get it or do the story!

Chris Casey said...

I deleted the robocall about halfway through, to get to the other, more important messages.

Kudos to Scott for making an effort, but robocalls? You want the voters to like you, not associate your name with an annoying phone call.

Bernie O'Hare said...

Ken, I'll agree that your question should be answered. I have to go back and check your posts, which I've really enjoyed. Did Ott tell you he would impose a tax increase? Last night, he told me he would avoid it w/ his three-point plan. I'll have to double check

Bernie O'Hare said...

CC,

I don't think a negative robocall helps a candidate. There are studies showing it may actually hurt him. A nice positve robocall, right before the election, often gives a candidate a bump.

Ott needs to be negative. I'm not saying this as a slam. He needs to give people a reason to fire Cunningham. His shot is fair. he makes no personal attack. But most people are turned off even by something as mild as what Ott put out.

I also think Ott gets some things wrong. He certainly at least implies that Cunningham has spent every dime and that's just not true.

Looks like we agree again. I'll have to double up on my meds.

Anonymous said...

Don did not spend all the money. He is forbidden by law from doing so. And given the pending budget disaster, that's a good thing. Sometimes state laws are necessary to protect taxpayers from scheming politicians.

Alan Earnshaw said...

Bernie,

We purchased our first home about 9 years ago. After replacing the roof last year and the heat pump this year, I have an even greater appreciation of the advantages of renting!

About 21% of households in the East Penn School District rent their homes. I consider renting completely acceptable, whether it is by choice or financial necessity, even for our office holders.

Anonymous said...

"The $20 million tax stabilization fund, or rainy day account, remains untouched."

Really? I've always questioned (more recently than ever) whether vast sums held in a segregated gov't acct. appearing on paper are actually there in reality. As an example, consider the Social Security Trust Fund where supposedly a significant (but dwindling) amt. is there funding our SSA and SSI obligations. Yet, I daresay that if a gov't official wanted to examine the actual acct. to see whatever it is that's in there, he/she would be told that such access was impossible.

I have no doubt that Lehigh Cty has an actual account called the Tax Stablization Fund. Where it's held, what's in it and how much are questions that we'll soon find out. Can one or more of the County Council member do a live sight verification and inform the public rather than relying on budget line items?

By the way, when next year's double-digit Lehigh Cty tax increase occurs, as I fear it will, what will have been the purpose of the Tax Stablization Fund?

Bernie O'Hare said...

Five of the nine LC Comm'rs are Republicans. Dean Browning is a fiscal conservative and an accounting whiz. I have already seen some of his graphs and analysis of this year's budget and what it portends. I can assure you that Dean alone provides plenty of oversight to Cunningham's budget process. I suspect he's seen the actual statements. Percy Dougherty is no sluch himself, and is there nearly full-time. Andy Roman, Sterling Raber and Glenn Eckhart have plenty of questions and insight. Rest assured. The money is there.

You ask a question that should make a conservative budget analyst cringe. You don't spend the rainy day fund just to avoid a tax increase. Too many execs do that, and that's how you end up w/ 70% tax increases. What you do is raise taxes when necessary instead of cooking the books.

That rainy day fund serves a useful purpose in the event that a roof unexpectedly caves in or there is some other major event requiring funding right away.

Anonymous said...

How many of the above mentioned brain surgeons were holding office during the 70% increase?

Anonymous said...

The ohare paradox. when one of his boys, Barron in Northampton County, says don't send money to the state and pay for Huamn Services at the county level, that is so great. Of course you would have enough for about a week and the State would fine you.

When Ott floats the idea he is not knowledgable.

The ohare paradox, explained with many words, but it all comes out to hypocrite.

Bernie O'Hare said...

Anon 12:24, I believe only 2 Comm'rs who passed that increase are still there.

Anon 12:25, You're just looking for an excuse to call me a hypocrite. The situations are completely different. When the state fails to comply w/ its own constitutional mandate and adopt a budget, it is acting illegally. Under those circumstances, I would withhold county money inetnded for the state. Ott is talking about something completely different - refusing state money intended for the county. Big difference.

Anonymous said...

(Anon 11:54 pm)

Again, I don't doubt there's a bank statement showing the amt. in the tax stabilization fund. The question is what's in it and how much? Is it an acct. w/ a bunch of high denominated Treasuries? Is it a money market? Is it in gold bullion (wishful thinking)?

Also, there's another way to avoic 70% tax increases. It's novel, because not many administrations try it. It's called reducing expenses.

Bill Leiner Jr. said...

Bernie,

I listened to a Mr. Ott interview on a local radio program the other day.

He offered little to no solutions to what his complaints are.

He used a lot of tired Republican slogans and sounded like a snake oil vendor, traveling show character of the 19th century. "Take this elixir and all your problems will go away for the cost of only 50 cents."

Alan Earnshaw said...

Anon 2:32 AM:

Municipal governments and school districts in Pennsylvania are only allowed to place their funds in very conservative investments like CDs.