Mayor Park Cities is the financial expert, the former CEO. I’m just an ex-sportswriter who reads a lot. So maybe he, or the award-winning city manager, can tell us why what’s going on nationally won’t affect the city budget. Because, frankly, I’m more than a little worried.
This summer, we have seen two of the four major U.S. investment banks disappear, with losses in the tens of billions of dollars. The federal government bailed out the quasi-governmental mortgage firms known as Fannie Mae and Freddie Mac, which may cost $200 billion. Meanwhile, one of the world’s largest insurers, AIG, is scrambling to avoid its own meltdown. Says one analyst: “A.I.G. has its tentacles in just about every financial institution in the world. There’s a real sense of impotence and at the same time grave concern at the situation.”
And the Federal Reserve has been lending money to banks left and right, terrified that they won’t have enough cash on hand to meet obligations.
And we’re supposed to believe that everything is just fine, and that the rosy projections in the budget –- that increases in property values will bring in 7 percent more in property taxes next year and that sales tax receipts will go up 1.75 percent –- are still true? Lehman Brothers was a $59 billion company that had $4.2 billion in net income in 2007, and it went belly up on Monday. (Here’s a note from one of the mayor’s biggest supporters, just in case anyone on the council is still confused about what’s going on on Wall Street.)
Maybe everything is OK, and Dallas will somehow escape the financial turmoil that is increasingly spreading to the rest of the country. If so, I’ll apologize and move on. But that’s the not the way it looks this week, with most of the council whistling in the dark, burying their heads in the sand, and performing other assorted acts of willful ignorance. They’re so out of touch that they actually expect sales tax revenue to exceed first estimates.
If the mayor, the manager and the council had a chance to prevent the same sort of layoffs and service cuts that took place at the beginning of the decade, but didn’t, then they’re the ones who will need to apologize. And I know a bunch of voters who will hold them to that apology.