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Monday, July 28, 2014
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Published: Saturday, 5/9/2009

Slippery fiscal slope

ANYONE who s had to balance a family or business budget knows that stealing from Peter to pay Paul is a practice that generally ends badly. It is disturbing, therefore, to hear Mayor Carty Finkbeiner suggest that his administration is cutting a very fine fiscal line in juggling its resources to pay current bills and leaving until later the task of sorting out what money actually belongs in what accounts.

Cities are required by state law to live within their means, but they are not held to account until the end of the fiscal year. That can make it attractive to pay bills by borrowing from other, sometimes restricted, funds, especially when receipts fail to keep pace with financial obligations as they come due.

But as tempting as that tactic sometimes appears, it is a dangerous practice that must be resisted because failure to do so could put the city in a real mess later.

Water and sewer receipts are a case in point. By law, they may only be used to pay bills related to those utilities. This is intended to ensure that profligate spending on day-to-day operations doesn t cut into maintenance and repair of the water and sewer systems, endangering the public health. Those funds, therefore, are kept segregated from other city funds.

But they aren t kept in a locked box. If the city were to run out of money a real possibility if the current $21.3 million budget deficit is not addressed officials could find themselves caught between not providing mandated services or illegally raiding restricted funds.

Every day that passes without a balanced budget makes it harder to close the budget gap because there will be less time left in the year to realize savings from cuts or collect revenue from new or expanded sources. Every day, therefore, Toledo veers closer toward a fiscal meltdown, and every day the temptation to skirt the law becomes greater.

Certainly, no one in city government wants to have to explain why they spent money illegally. Fortunately, there is a solution: Balance the budget.

The Finkbeiner administration is, by its own admission, skating close to the edge of what it s allowed to do to pay the bills. That s another good reason to solve the budget problem now, before the city falls off the cliff.



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