It is becoming increasingly clear that there is little solid information on the fiscal impact of the proposed $80 million sale of Trenton Water Works infrastructure available in the city.
All city officials have offered the public of late are predictions and estimates that show the water utility either breaking even, facing a deficit, or making a modest surplus following the sale of suburban infrastructure, which generates 60 percent of the utility’s total revenue.
This constantly evolving fiscal picture means one of two things: either the city has not done its due diligence on the deal, or it has, and that analysis was covered in a lot of red ink.
Whichever case it is, it means the city should probably not be going through with sale, which promises to severely reduce the total amount of revenue generated by the utility and eliminate cash surpluses that can be annually transferred into the city’s general fund, keeping our taxes low.
Complicating the matter is that the city’s budget delays and assumption of $20 million in sale revenue for use in this year’s budget mean the delays the sale faces because of a citizens’ protest petition will surely result in a catastrophic tax increase, barring emergency state funding or some other scenario.
The city is using this tax increase – from a .09-cent increase with the sale to a $1.09-cent increase per $100 of assessed value without it – as a public relations tool to try and get petitioners to withdraw the petition, or at least convince the populace of the city to approve the sale.
While some misguided civic groups in the city have begun to cling to this tax threat, their position is ignorant in that it fails to account for the fact that, regardless of the sale, from now on our city faces catastrophic budget shortfalls and tax increases each and every year.
Therefore, the nature of the debate should not consist of shouting about tax increases and vilifying the petitioners.
Instead, Trentonians should decide whether or not to opt to face such a shortfall now, with the use of a revenue-generating asset, or face an equal or greater shortfall and tax increase in 15 months, without the use of a utility that generates surplus cash.
I think the answer is clear.
Keep the utility.