Official: “The day of reckoning is here”
Municipal budgets have been a common subject on this blog. In fact, I expect that the first real crisis felt by most Americans will come from the effects of government budget cuts, and how they will impact services which people rely on.
Many inside local government are already seeing this looming crisis. Today’s example comes from Waterford CT. It is a textbook scenario of how this issue is playing out.”The day of reckoning is here,” the towns finance board member Georg Peteros said. After decades of huge tax payments from a regional nuclear power plant, the town still finds itself with a deficit, due to not planning for ever having lower revenues. “We really squandered an opportunity,” said First Selectman Tony Sheridan.
In the future, the town must address the largest expense in the budget: employee salaries and benefits. ”We’ve already
squeezed all the fat out of the budget going after supplies,” he said. Peteros predicts that as town departments scramble for funds in future years, it could make Waterford a more politically charged town. ”I can see politics becoming more contentious as residents become more agitated as their tax rate goes up,” he said. “Dark days” are ahead, as he put it.
The White House is anticipating another blow to the economy when jobless figures are released on Friday. The administrations economic advisor, Larry Summers is trying to buy some time by pinning the results on the weather, asking Americans to ignore these figures.
“The blizzards that affected much of the country during the last month are likely to distort the statistics. So it’s going to be very important … to look past whatever the next figures are to gauge the underlying trends,” Summers said in an interview with CNBC.
What will the answer be if employment figures are still bad in March?
