Don't drown in debt

It is doubtful that many residents pay close attention to the way that Teaneck actually finances its ongoing spending. Sure, most of us have a pretty good idea of our own annual tax liability, and now some of us even have a pretty good grasp of property assessments in the wake of the recent revaluation, but keeping track of the real nuts and bolts of monies in and monies out is not something for which the average concerned citizen has the time or the attention span. Do we need to start paying attention?

An alarming, though altogether unsurprising, report from Moody's Investors Service cited in today's Star-Ledger ranks New Jersey as the fourth largest debtor state in the Union (for reference, the state ranks ninth in population). On a per capita basis, the debt load is $3,317 per resident, triple the national average, and growing. Whether this is merely a reflection of the State's many financial problems or another cause of them is beside the point. The bottom line is that for New Jerseyans, the already heavy tax burden and all the intractable problems it causes or compounds are here to stay.

While this in and of itself is a sobering message for Teaneck taxpayers and officials who hold out hope that better lobbying in Trenton will defray the rising cost of maintaining local services, the story doesn't end with a heavy state debt burden. Teaneck, too, has a significant amount of debt outstanding for both municipal and school district purposes. A recent disclosure filing put that burden at $388 per capita. While this is far below the State mandated ceiling of 3.5% of equalized valuation, it is not insignificant. Furthermore, it may rise again soon, as the Council is slated to consider two ordinances to raise funds through bond issues tonight (see Ordinances #4003 and #4004 on the agenda).

The question facing Teaneck is not whether we really need to own a packer truck or even whether bond issues ever ought to be relied upon to finance current spending. There are certainly compelling reasons for both. What we do need to weigh is whether we are living above our means in the present and digging ourselves a hole for the future. It is always best to defer the tough decisions on belt tightening to a later date, hoping that State funds or increased ratables will make up the difference. Is this really a good bet for us to make?