Proposal to Double NorCo's Rainy Day Fund Fails By a 4-4 Vote

At last night's meeting, Northampton County Council nixed a proposal to double its rainy-day fund from 5% to 10% of general fund expenditures. The measure, which required five votes to become county law, was supported by Council members John Brown, Jeff Corpora, Tom Giovanni and Lori Vargop Heffner. It was opposed by Council members Ken Kraft, Kelly Keegan, Jeff Warren and Ron Heckman. Council member John Goffredo, who could have tipped the balance one way or the other, was absent.

Before the vote, incoming Executive Tara Zrinski told Council that she already has serious reservations about the budget proposed for next year. (I outlined them here). She also opposes doubling the rainy-day fund. "Let's call this what it is," she said. "It is an unfunded mandate that fails to meet our statutory and moral obligations while burdening future administrations and misleading the public on fiscal stabilization." She called the 10% figure an "arbitrary hurdle that is out of step with the intent of GASB (Governmental Accounting Standards Board) That intent, she asserted, is "clarity and transparency, not artificial inflation of reserves for optics over substance." 

She is particularly irked that Council would even consider this ordinance in the face of a proposed budget that already "slashes essential services" like two prison rehabilitation programs. She noted that a 10% rainy-day fund would require her administration to pony up approximately an additional $8 million. She added her displeasure at the failure to fund the pension fund for retirees. "This is not good government. It is an act of willful neglect."

Council member Ron Heckman said he agreed with many of the points made by Zrinski as well as Council member Ken Kraft's warning the previous day that doubling the rainy-day fund would make a tax hike necessary. He agreed that "10% is a bit of a reach," and proposed increasing it to a more manageable 7%. His suggestion failed. Only Council members Vargo Heffner, Giovanni and Corpora agreed with him. The remaining members present (Kraft, Keegan, Corpora and Brown) voted No. 

John Brown argued that the rainy-day fund needs to be doubled as a matter of fiscal responsibility. "I believe we'd be having a very different conversation today if the state budget had not passed," he observed. Just two weeks before, he noted that 170 county employees were in danger of being furloughed. He did agree that NorCo finances are in dire straits, and predicted that in mid-January, the county will have to take $10-15 million from the general fund for Gracedale to cover a deficit. 

Heckman, like Kraft the day before, said there would need to be a tax hike to find the money. Keegan pointedly asked Brown if he'd support a tax hike to double the rainy-day fund. He said No, but provided no suggestions about where the county could find the money. 

Vargo Heffner proposed changing the effective date of the new rainy-day fund until 1928, but that measure died for lack of a second.  

She then warned, "We're going to have to raise taxes anyway. It's coming. Just plan on it." 

So ends the attempt to beef up the county's rainy-day fund.