TodayGood news in a bad economy
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Editorial
Article RatingEven in a down economy, there are winners. Ironically, the same slump eating away at investments for both individuals and institutions may save local taxpayers some dough in a few areas — even as some municipal governments in Cumberland County are floating the idea of tax hikes and higher user fees for 2009 to cover rising costs and declining revenue.
The people of New Kingstown look to be big winners, thanks to the bleak economy. The bypass announced with such anticipation not so long ago was put on hold this summer after rising petroleum and other materials costs put the PennDOT project out of reach.
But now the project is back on. Bids have been opened and it turns out costs have dropped, to somewhere in the neighborhood of $7.4 million. The reversal happened because of now-plummeting oil prices and the fact that construction companies in these nervous times are eager to get work.
Construction should begin in late February or early March. Excited townsfolk are again talking about celebrations and a ribbon-cutting ceremony, since they’ve been working for years to divert Route 11 traffic that now cuts through the heart of the village.
The news is even better than the fact that construction is back on, though. PennDOT spokesman Greg Penny says the current bids are actually lower now than originally anticipated.
It’s good news for the region, too, because the work is likely to go to an area company.
Meanwhile, in Carlisle, where council has been putting together a 2009 budget, there was a bright spot last week, too.
In putting together the financing for the $28 million sewer plant upgrade required by the Chesapeake Bay Compliance Plan, the borough learned it will be able to save between $75,000 to $80,000 in financing costs because it can obtain a $5 million loan at 3.99 interest for 12 years rather than going with a bond issue, as is usually done for projects of this scale.
“Sometimes in the midst of adversity, there is opportunity,” borough manager Steve Hietsch said. “We are euphoric. We got an excellent rate — far better than what we anticipate from a bond issue.”
What this means for residents is no sewer rate hike in 2009 or 2010.
That’s a small win as council continues to ponder a 0.27-mill property tax increase to make up for a downturn in real estate transfer tax revenue and building permit fees. These are already trending toward a $200,000 decline by the end of this year and are expected to remain down.
Council is also looking at raising water rates and has decided not to incur the costs of moving borough hall to new quarters.
It joins the list of numerous government bodies – all the way from the state through county government down to the most local levels — trying to balance budgets squeezed from both directions.
Despite the occasional “win,” though, we expect more along the lines of service reductions — and of tax hikes — in many communities before the current economic crisis plays itself out.
That is why we will be watching to see if officials pay more than lip service to their assurances they are belt-tightening wherever possible.
Public officials have an obligation to manage taxpayers’ money stringently, in good times and bad. But there’s nothing like a serious budget shortfall to shine a strong light on waste, duplication and nonessentials in any organization, be it public or private.
Many families are being forced into the process of discovering what is essential in their spending and what is a luxury. Now more than ever, they have a right to expect the same from the governments they support through their hard work.
