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If Schnirman Had an $8M Surplus, How Would He Use it?

If the Great Recession wasn’t a “rainy day” worthy of using the city’s “rainy day funds” to offset tax increases, when and how should the city have spent these funds?


It's budget time and in just a few days City Manager Jack Schnirman will be unveiling his proposed budget for 2012-2013 fiscal year. He has already laid the foundation for a big tax increase by claiming there is a “fiscal emergency” and by crying that the city’s rainy day surlus fund has been depleted. Schnirman has been chastising the prior Coalition administration for spending the city's surplus (rainy day) fund. However, I am sure that if he had the surplus available he would use it just as the Coalition did: he would use it to offset potential tax increases on our residents.

In politics, it’s easy to play Monday Morning Quarterback. But that is exactly what Schnirman and City Council members Fran Adelson, Scott Mandel, Len Torres and Michael Fagen have been doing. If the Great Recession wasn’t a “rainy day” worthy of using the city’s “rainy day funds,” when should the city have spent these funds? 

What Schnirman and his administration doesn’t tell people is that the surplus was spent over a number of years to prevent property tax increases on the already over taxed residents of Long Beach during the recession. Despite what Schnirman and the City Council want you to believe, the $8 million “rainy day” (surplus) fund was built up between 2004 and 2009 and it was not spent in one fell swoop.

In 2004 and again in 2008 the Coalition promised not to raise taxes and they kept that promise. Unlike Adelson, Mandel, Torres and Fagen, the Coalition actually kept the campaign promises they made to the people of Long Beach. During the Great Recession the Coalition used the city’s surplus funds in an effort to avoid raising property taxes on our city’s residents during the most severe economic downturn in a generation.

While the Long Beach Democrats criticize the way the Coalition spent the surplus, other prominent New York State officials such as Governor Andrew Cuomo and New York State Comptroller Thomas DiNapoli advise using the same policy used by the Coalition: using surplus funds to offset tax increases. In fact, during his campaign for governor, Cuomo released his New NY Agenda: A Plan for Action. One of the key components of his plan was to “use budget surpluses for direct tax relief” (page 51). Cuomo wants to use surplus funds to avoid raising taxes on residents. While Adelson, Fagen, Mandel, Torres and Schnirman criticize the Coalition for using the surplus to offset tax increases, Cuomo is doing exactly that and he is encouraging cities and towns throughout New York to do exactly what the Coalition did! 

Furthermore, DiNapoli proposed legislation that would make school districts return surplus funds (rainy day funds) to taxpayers. DiNapoli proposed a new law that would require localities to return surplus money to taxpayers. DiNapoli has "cited several districts for having excess funds” and found that “many districts had more money (in reserve funds) than would be reasonably needed." Both the Coalition and DiNapoli believe that taxpayer’s money is better off in the pockets of taxpayers than in the bank accounts of localities. Obviously, Mandel, Torres, Adelson, Fagen and Schnirman, disagree; they think they can spend your money better then you can!

Do Schnirman, Adelson, Fagen, Mandel and Torres disagree with Cuomo and DiNapoli’s policies? They must, because they have been so extremely critical of the Coalitions’ policy of using the surplus to offset tax increases - a policy that Cuomo and DiNapoli support and encourage.

A municipality’s surplus/rainy day fund is used for “rainy days”. In light of the catastrophic Great Recession that began in 2008, the Coalition had to make a choice; they could either raise taxes and further hurt taxpayers or use the surplus to offset those tax increases. I believe the Coalition made the right decision. Raising taxes on people during an economic collapse is the worst possible thing to do. It hurts the economy as a whole and it hurts individual people and families at the most local level.

The fact of the matter is this that the Great Recession that began in 2008 was the single greatest economic collapse since the Great Depression of the 1930’s.  According to Moody’s Analytic Index, in April 2009 (three years ago), 93 percent of cities were negatively effected by the recession. It's 2012 and Long Beach was successful at holding off the effects of the recession until now. In my book that is an accomplishment. The surplus money that was saved for rainy days was the taxpayers’ money, and it was returned to them by holding the line on taxes in Long Beach. Did Adelson, Mandel, Torres, Fagen and Schnirman want us to use the rainy day funds earlier? Later? Never? If not during the Great Recession, when? The Republican Coalition used them in the last few years to offset any tax increase on taxpayers in the city because raising taxes on people during a severe economic downturn makes a bad problem worse.

If the Great Recession wasn’t a “rainy day” worthy of using the city’s “rainy day funds,” when should the city have spent these funds? I have a feeling that if the Coalition had chose not spend the surplus and raised taxes instead, Torres, Adelson, Mandel, Fagen and Schnirman would be screaming, “The Coalition sat on an $8 million surplus while they raised your property taxes, shame on them!”

Here is the big question; if the Coalition had not spent the surplus and today there was still $8 million in the rainy day fund, how would Adelson, Mandel, Torres, Fagen and Schnirman use it?  Would they use it to offset any potential tax increase the city now faces in the upcoming budget? I have a feeling they would have used the surplus the same exact way the Coalition did over the past few years. It’s just politically convenient for them to complain about it now because it fits perfectly into their public relations agenda.

Here's the bottom line: It appears that Schrnirman, Adelson, Mandel, Torres, and Fagen want to raise your taxes - even if they don't have to. They are angry that the Coaltion used the surplus funds to balance the city's budget rather than raising taxes on Long Beach residents. No resident wants their taxes increased and no politician wants to raise property taxes if they don't have to. Yet, Schnirman, Adelson, Mandel, Torres and Fagen complain that the surplus was used and that the Coalition kept their promise to not raise taxes! If this is any indication of what this administration is going to do in the upcoming budget, you better hold on to your wallet. Here comes the tax increase! 

Adelson, Torres, Fagen, Mandel and Schnirman are being hypocritical and are using the current fiscal situation to their political advantage. It’s a strategy that won’t work. All it does is hurt our city’s reputation and our property values. 

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Nathan Jessup April 12, 2012 at 12:09 AM
Mr.hennessey , im angry with the former administration and furious with new one. Bottom line your right about the economy being bad but madoof theofan did nothing about reducing overtime,spending and didnt his job,please dont patronize us about him or the bloated police budget under sofield. With that being said ,how dare these people from crookhaven come here and offer a 40 percent tax increase to our city while hiring his people for money.One penny over the last employee is a slap in the face to the taxpayers and workers who are going to be hurt. My advice to you is get 3 new candidates and take over the party because the people that ran the republican party hould be embarassed too. The taxpayers and workers are know gonna get crushed and want real change .STEP UP........
Kevin Heller April 12, 2012 at 02:20 AM
The problem is, Jimmy, you do not use FACTS to promote your political agenda. I reviewed financial statements of the city, as well as Moody's and independent audit reports. The FACT is that your coalition buddies hired more and more people and handed out raises while having full knowledge that the city was spending more than it took in. You knew the burden of pension, healthcare and salaries were going up and that the surplus was going to be eaten into and did not negotiate with unions in good faith. Rather, you knowingly doled out taxpayer money for payments to your friends and knew well in advance that you'd be able to blame YOUR mismanagement on the current administration. If one spends more than they take in and know that the fiscal deficit is going to balloon in the near future while telling rating agencies that your balance sheet is fine, then what you have done is commit FRAUD!!! Your coalition buddies pre-negotiated contracts so your friend and family were well taken care of and left the current administration, and taxpayers like me with very little wiggle room. I hope this is all investigated and the REAL crooks found out. Smart people like me see right through your BS. IF taxes have to go up and layoffs ensue, reasonable people will see where the REAL blame lies - with you and your cronies. That is the truth!!
Datt Matt April 12, 2012 at 04:01 PM
Well said, Mr. Heller, well said.
Nathan Jessup April 12, 2012 at 04:54 PM
Kevin, you hit it on the head ,the republican administration lied to the taxpayers and all union workers that the finances are fine. Now,were getting hit with a tax increase and workers are getting laid off. It's a shame because now these people are all gonna suffer. I voted for a new administration and aren't happy at their hypopcrisies with hiring friends and family for more money. Jimmy loses creditability because he wasnt blowing the whistle on the coalition. Stop the spin and offer solutions to fix and ease the pain for all of us.....
John April 12, 2012 at 05:56 PM
Here's the deal, Jimmy. We're a small city that doesn't need nor deserve the type of bloviated hyper-partisan BS that you keep spewing. Inextricable differences between parties doesn't need to exist in communities like ours and your ongoing rants are doing nothing but exasperating the issues. We need civil and sound leadership. If you want to be part of the solution, get out from behind your computer, strap one on and show up at our friggin' council meetings. Be a man and confront the City Manager and duly elected Board, state your case and engage in meaningful dialogue. All your doing here is fanning the flames of paralysis and partisanship, neither of which is helping move this city forward. Make no mistake, Jimmy, as of right now, you are part of the problem. Time for a little introspection on your part. I hope to see you engaging in meaningful dialogue moving forward instead of just throwing bombs.
Richard Boodman April 12, 2012 at 06:04 PM
Well said, John.
oceanview April 13, 2012 at 12:44 AM
Jimmy superego was part of problem and not the solution. He helped recklessly spend his neighbors $$$$. Its stomach churning. Now he is like a little kid in preschool pointing the finger at the new kid and blaming him. He wants to have control over $$$/jobs again.
Neutron April 13, 2012 at 05:41 AM
Mr. Hennessy, where I went to college we learned that if you make a dollar you can’t continuously spend $1.25. Businesses that do that tend to not stay in business. The same principle holds with peoples personal finances too. Yet, you seem to argue that is an acceptable way to run a government. You say “If the Great Recession wasn’t a “rainy day” worthy of using the city’s “rainy day funds,” when should the city have spent these funds?” How about fixing/replacing the boardwalk? How about replacing our 100 year old water tower? How about repaving some of our dilapidated roads? I could go on. You also say “the Coalition had to make a choice; they could either raise taxes and further hurt taxpayers or use the surplus to offset those tax increases. How about if expenses exceed revenues, you cut the expenses. Can you please comment on how much revenues decreased vs. how much expenses changed when the Coalition reigned during the Great Recession?
anna April 13, 2012 at 02:46 PM
"How about if expenses exceed revenues, you cut the expenses. Can you please comment on how much revenues decreased vs. how much expenses changed when the Coalition reigned during the Great Recession?" Yes please do tell
delete me April 13, 2012 at 02:47 PM
I just read this in the Tribune article :"“I would not have called Moody’s in and had our bond rating dropped, which caused us to pay millions more on our bond indebtedness in interest,” he wrote on his blog in Patch. “I would not have told the world we were in a fiscal emergency and hurt our residents’ property values.”" So you were standing behind the Coalition hiding the financial crisis from us and would have stood behind them had they been reelected in continuing to hide the crisis from us? Until when, the entire city collapsed? Did your friends think they could hide our debts from the world forever?
Candygram for Mongo April 13, 2012 at 03:13 PM
that statement certainly jumped out at me as well
christine April 13, 2012 at 08:15 PM
Let me start by saying i think the last admin mismanaged the finances, specifically with the crazy OT-howeve, mr heller, how do you feel about the current admin hiring all of their out of town friends at higher wages? Also in 2004 the coalition took office with a $7 million deficit and didn't raise our taxes... why cant the current admin do the same or raise the taxes much less then the 40% it will be going up over the next 3 years. One last thing- you seem to be criticizing the city spending more than they took in yet this current budget is spending more than our prior budget. It seems that you are as politically one sided as hennessey
Goodbye Jack April 14, 2012 at 12:33 AM
Wait a minute don't think for a minute if the new administration was in office with that huge surplus they wouldn't have used it. New or old doesn't matter. They used the money to not raise taxes that is the point that is being raised here. And your right eventually the well runs dry and thats that. Prior the Coalition winning the election in 2004, the Citys bond rating since 1990 has been Baa3....who was in charge then? Who ran the City for all those years? The only time it went up was when the Coalition took office... so how appropriate, back to them as is...
Candygram for Mongo April 14, 2012 at 12:50 AM
In what way is "they would have done this or that" relevant?
Silly Long Beach April 14, 2012 at 12:58 AM
"Goodbye Jack", you sir are a schmuck! The "coalition" was on Moody's "watch list" in 2004 and 2005! It wasn't until John Laffey imposed the 25% tax increase that Moody's backed off. That was in 2006, the "coalition" took control of city hall in 2008 and claimed to be saviors. They spent each and every single dollar that resulted from the increase. The people in control now are doing a piss poor job too, but don't for a second take the responsibility away from where it belongs - with Hennessy, Sofield, Theofan and their cohorts!
Publius April 15, 2012 at 12:58 PM
The Coalition controlled administration left the City in the lurch because they were not straight about the fiscal condition of the City. Telling me don't be mad because you used the rainy day fund and did not raise your taxes is a bootstrap argument. You should have been straight with the residents about the fiscal situation and taken steps to control and cut spending. We now have an administration who is telling us what the fiscal facts are -- yes, they spin, but I can ignore that and get to the dollars and cents. Their failure -- and it a young administration -- is they are trimming around the edges of the fat and not attacking the heart of the problem. They need to do a deep dive into what is the appropriate civil service level to run this City and give the residents the beautiful City they deserve and pay for (but don't get), and then right size the work force to provide those services in a topnotch way. I have no problem paying a level of taxes that get me a City with clean and maintained streets and sidewalks, grass malls, boardwalk. On these basic quality of life staples we look like garbage compared to many other towns where home prices are equal or less.
Ex-LB Dem April 18, 2012 at 09:26 PM
I saw the proposed Blue Print today. I live in the canals. This crazy council is suggesting that the city sell the small plots of property in the canals that are along the canal! For years, people have been using them as their property and have installed docks, decks, jacuzzi's, etc! Now they want to sell theses strips that have been ours for 80 years. Where are these people who buy them going to park? This is out of control. This is what we get when we elect a bunch of real estate people into power. Adelson (a real estate broker), Mandel (real estate lawyer), Zapson (real estate lawyer), Torres (landlord). They are selling off LB property! While Adleson's real estate brokerage sell the property? Will Mandel and Zapson's firms handle the transactions!! This is insane!
john p April 18, 2012 at 11:12 PM
every time the dems are in they raise taxes.sometimes 25 sometimes 40 percent.any moron can do that.show me the real savings that you make and that your not hiring friends and family.lol i guess some people here dont care how much you raise there taxes as long as there taken care of.i would get rid of the paid firemen first.lot of waste there
Publius April 23, 2012 at 06:34 PM
john p. -- it not a party issue. it is a politics as usual issue. both parties have layered on jobs for years and years and years. changing parties is not the issue. changing the attitude and what they do are the issues. go to city hall for the next two meetings and offer your suggestions. offering it here will not affect the city council. they need to hear that the taxpayers will not stand for tax raises with no effort made to address the structural infirmities with the City's cost structure (headcount, compensation level, benefits).
Jay Gusler April 23, 2012 at 08:27 PM
Enough already Jim. No one but you is interested in the average $100 per taxpaying unit that would be saved by eliminating the paid force. Where were your cries to eliminate us when YOUR administration was hiring 5 new FF's and promoting 4 more LT's? It is only since that 'bribe' attempt failed to secure our endorsement that you now call for our elimination. I guess when we backed the Coalition we were vital, but since we backed the Dems this time around we're now a "lot of waste". You can call for eliminating the paid FD under all the false names you want (and there have been dozens), it's still not getting any traction. Maybe you should just let it go already, no? Hell, a year and change from now you'll be seeking our endorsement for your slate yet again. Good luck with that.

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