Monday, December 5, 2011

I IN MY KERCHIEF AND MA IN HER CAP

I IN MY KERCHIEF AND MA IN HER CAP: We admit it. Listening to fiscal and financial discussions- actually anything that falls under the subject of "the economy"- is, for us, like taking a handful of Ambien.

So when we sat down to watch the Kaua`i County Council discuss "Resolution 2011-77... establishing the County of Kaua'i reserve fund and reserve fund policy"- as they did last Wednesday- we carefully ensconced ourselves with a nice blankie and set the recliner on stupor.

The issue isn't new and, although some councilmembers obviously disagree, it comes down to a negative semantic that has caused embarrassment to councils past.

For decades the term "unexpended surplus" has been used on Kaua`i for the amount that was "leftover" when the budget was completed. And that has been an open can of worms slithering around on the council table for just as long, as people ask why there is one since, in theory, the council is supposed to adjust the real property tax rate based on how much it budgets.

In practice, some of it is "appropriated" throughout the fiscal year, as needed, through "money bills" and the rest is left over for the next year's budget.

Enter stage right, Mr. Fiscal Conservative, current Council Chair Jay Furfaro, a former hotel manager who has made it his mission to reform this practice by changing the name from "surplus" to "reserve fund."

Now we've given Furfaro plenty of guff for his habitual bombastic oratory that often baffles the assembled with its pomposity and buffoonery. But although we really wouldn’t know because unless it's the theory of surplus value, we're pretty much unable to comprehend complex money matters, when it comes to fiscal affairs Furfaro sure seems to be able to tell his assets from a hole in the ground.

It seems that surpluses are "out" these days and those who recommend fiscal policy on a national basis prescribe "reserve funds"- specifically in amounts of 20 to 25% of the jurisdiction's budget.

Furfaro has talked about this for years so the resolution in question was, in his eyes, a first step in establishing the correct way to look at the fact that the county will still be collecting more than it spends- or at least the councilmembers will have an explanation for the public that doesn't push the "hey- that's my money you're spending" button as hard.

Now, enter stage left, Councilmember Tim Bynum, the "progressive" responsible for things like the plastic bag ban and the exit- by falling off the stage- of former Chair Kaipo Asing after Bynum challenged Asing's secretive, paternalistic policies in the name of open and good governance.

But Bynum found himself in an unaccustomed slot this year as Chair of the Finance Committee after complaining all last year that Mayor Bernard Carvalho's county-employee "furlough" program was actually a political stunt designed to make the legislature think the county was being fiscally conservative enough to deserve our fair share of the transient accommodations tax (TAT)... or at least that was our take on the effort at the time.

So Bynum, seeing the opportunity to make sure that these kinds of shenanigans were a thing of the past became a Republican For A Day.

As a spreadsheet of sorts was posted on the wall-mounted screen, Bynum read off the "surpluses" going back to 2001... $12 million... $14 million... $17 million... $18 million... until he got to last year, reading off- with the proper emphasis and outrage- $68 MILLION.

Noting that this was quite obviously more than the 20-25% recommended for a reserve fund, Bynum pulled out an amendment to Furfaro's resolution that would set a policy for what to do, not only if the fund dipped below 20% but what to do if it got up above 30%.

And, in true populist anti-tax Norquistian Republican form he stated that if it were to go above 30% his "first priority personally would be to reduce the amount that we're taking from the people who live here to give a tax refund or rebate or lower taxes.

"Give it back," he demanded, "It's not our money. It belongs to the people of Kaua`i."

Bynum went on and the only thing missing from his spiel was the actual use of the phrase "tax and spend."

Meanwhile Furfaro looked like he was going to have a conniption fit waiting for Bynum to finish. And when his turn came he managed to crystallize his thoughts in one booming sentence.

"THIS COUNTY OWES 170 MILLION DOLLARS."

The meaning was clear, although Furfaro made it clearer. We've already spent that $170 million- or at least have committed to spending it very soon. The county recently refinanced its old bonds and took out new ones for all sorts of "capital improvement projects" from sewers to levees to bridges and roads... 81 of them to be specific.

And if anything was going to happen with the (don't-call-it-a) surplus over and above the recommended "reserve," Furfaro said it should be used to pay for what we already spent by paying down our debt faster than the current $4.7 million a year.

In other words, now that we've collected the "tax" it's time to "spend" it.

The issue of whether to set a policy in the current resolution- which is actually non-binding and is only to set up the policy of creating the reserve fund that will later need to be codified in an ordinance- or whether to include the policy for what to do if the fund is over or under the Goldilocks range of 20-25%, the paradigm shift of the two councilmembers acted on us like half a dozen cups of espresso, the idea of a nap now only a dream.

While we don't particularly "get" this high finance stuff, we think the means of production should be in the hands of the proletariat- or whatever the 21st century equivalent is. But we usually "get" the politics.

Except in this case we've got Furfaro, the ultra conservative- at least for Kaua`i where conservatism usually goes to die- attempting to spend the "extra" already collected taxes while our classic liberal wants to give it back.

It was a good thing that Carvalho's weekly "Together We Can" snooze-fest was coming up next or we'd never have gotten any sleep.

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