From Charles Morgan:
Joanne Louth and Chris Marion released a draft response to my proposal that is full of errors, shifting assumptions and simple misrepresentations of the truth. It is egregious that they would release this information without having made their response final after giving me a chance to provide them my feedback. It is a violation of New Jersey law for the Mayor to use the Township staff, using taxpayer money for his political purposes in his campaign. That is what he has done be allowing these falsehoods to be put into the public domain in this fashion.##M:[more]##
Ms. Louth says that “the proposal to use an additional $2.45 million of fund balance or a total $6.65 million of the Township’s $7.6 million cash fund balance to support the 2009 Municipal Operating Budget would result in a 7.3% reduction in the municipal tax rate (not 12.1%).”
The current tax rate is 31.4 pennies. The administration has proposed a 1.7 penny increase in the tax rate to 33.1 pennies. An increase to 33.1 pennies from 33.1 pennies is a 5.4% increase. My proposal is a 4 penny reduction in the tax rate to 29.1 pennies.
A reduction to 29.1 pennies from 33.1 pennies is a 12.1% reduction. A reduction to 29.1 pennies from 31.4 pennies is a 7.3% reduction. The administration has not changed its proposal from a 1.7 penny increase to a 0.0 penny increase. The budget will be introduced on May 16 with a probable tax rate of 33.1 pennies (passing with a probable 4-1 or 3-2 vote). If I’m elected Mayor, my attempts at a reduction will occur after July 1, 2009. My reduction, if successful, will be from 33.1 pennies to 29.1 pennies. That is a 12.1% reduction, not a 7.3% reduction.
The Louth assertion that my proposal is a 7.3% reduction is a misrepresentation of the truth. Louth is the West Windsor CFO. The Louth assertion using a false assumption casts my 12.1% number into doubt because she is the CFO and I’m “just a politician.”
The Louth assertion helps the Mayor and damages me in an election. The Louth assertion is a political statement for the benefit of the Mayor rather than a truthful statement on behalf of the Township (the Mayor and me). The Louth assertion has been published in the May 1, 2009 edition West Windsor & Plainsboro News. The next issue of the West Windsor & Plainsboro News does not come out until May 15, 2009, three days after the election.
It is impossible for me to recover from the damage – the only possible recovery would be a letter from the CFO to every resident in West Windsor correcting the information. My documentation of my proposal comes from my campaign website. My materials to which they are responding are campaign materials.
We are confronted with a response to my campaign materials from the Township rather than a response from the Mayor’s campaign team. I have demanded that these materials not be released into the public domain until we are assured that the materials have been cleaned of bad assumptions and misrepresentations. They have ignored our demand. The Mayor should have instructed the Township staff to stay out of a political campaign and stick strictly to budgetary matters. The Mayor has not so instructed the staff.
By standing aside and letting the staff act in this way, he is implicitly endorsing their actions. This is the use of Township staff and taxpayer money for political purposes.
Ms. Louth says that “the proposal to use an additional $2.45 million of fund balance or a total $6.65 million of the Township’s $7.6 million cash fund balance to support the 2009 Municipal Operating Budget would result in a 29.1 cent municipal tax rate (not 27.1).
A decrease to 27.1 pennies from 31.4 pennies is 12.7%. I have never claimed a 12.7% reduction. I have said that I would roll back the rate to 27.1 pennies; that is an error, I should have said 29.1 pennies or 27.4 pennies. This is an accurate correction. Nevertheless, the more important point is that I am consistent in saying that I am proposing a 4 penny and a 12.1% reduction from 33.1 pennies to 29.1 pennies.
Ms. Louth says that “the proposal to use an additional $2.45 million of fund balance or a total $6.65 million of the Township’s $7.6 million cash fund balance to support the 2009 Municipal Operating Budget would result in a 2.3 cent decrease in the municipal tax rate (not 4.0).”
The current tax rate is 31.4 pennies. The administration has proposed a 1.7 penny increase in the tax rate to 33.1 pennies. My proposal is a 4 penny reduction in the tax rate to 29.1 pennies.
A reduction to 29.1 pennies from 33.1 pennies is a 4 penny reduction. A reduction to 29.1 pennies from 31.4 pennies is a 2.3 penny reduction.
The administration has not changed its proposal from a 1.7 penny increase to a 0.0 penny increase. The budget will be introduced on May 16 with a probable tax rate of 33.1 pennies (passing with a probable 4-1 or 3-2 vote). If I’m elected Mayor, my attempts at a reduction will occur after July 1, 2009. My reduction, if successful, will be from 33.1 pennies to 29.1 pennies. That is a 4 penny reduction, not a 2.3 penny reduction.
The Louth assertion that my proposal is a 2.3 penny reduction is a misrepresentation of the truth. Louth is the West Windsor CFO. The Louth assertion using a false assumption casts my 4 penny number into doubt because she is the CFO and I’m “just a politician.” See my comments above with respect to the 7.3% reduction assertion.
Ms. Louth says that “the proposal to use an additional $2.45 million of fund balance or a total $6.65 million of the Township’s $7.6 million cash fund balance to support the 2009 Municipal Operating Budget would result in a ‘Roll Back’ of taxes somewhere between the 2007 municipal tax rate of 28 cents and the 2008 municipal tax rate of 31.4 cents (not the 2006 municipal tax rate of 27 cents).”
The purpose of this “conclusion” is unclear. It doesn’t state anything new. This is argumentative. Being argumentative, it seems purely political.
Ms. Louth says that “the proposal to use an additional $2.45 million of fund balance or a total $6.65 million of the Township’s $7.6 million cash fund balance to support the 2009 Municipal Operating Budget would result in a $126 one time savings to the taxpayer (not $214).”
The $126 savings is Louth’s calculation of the one year savings for the average taxpayer from our proposed reduction in the tax rate.
Louth implies that we have claimed $214 savings for the average taxpayer from our proposed reduction in the tax rate – we have not.
We have not made any claims about the one time savings to the taxpayer. We have claimed that it costs the average taxpayer $214 to save $44 from the Triple A rating awarded to West Windsor from Standard & Poor’s.
Louth has converted a cost number into a savings number – a clear misrepresentation of the truth.
Louth has not responded to our assertion that the savings is $44 for the average homeowner from the Triple A. She shifts the focus from the savings under the Triple A to the savings from the 4 penny reduction.
This is argumentative. Being argumentative in this context, it is purely political.
Ms. Louth says that “the proposal does not take into account the impact on the municipal tax rate, fund balance reserve and the level of services provided in 2010 and beyond.”
This statement is a misrepresentation of the truth: We have taken into account the impact on the municipal tax rate. We have taken into account the impact on the fund balance reserve. We have taken into account the level of services provided in 2010 and beyond.
The statement is argumentative. Being argumentative in this context, it is purely political.
Ms. Louth says that “the proposal relies on the assumption that the fund balance available in 2009 will continue to be available for use in 2010.”
These statements are a misrepresentation of the truth. We have not made any “assumption that the fund balance available in 2009 will continue to be available for use in 2010.”
We have taken into account the probability that the fund balance available in 2010 will be different from the fund balance available in 2009. We have taken into account the new nonprofit community foundation as a source of revenue in 2010.
Louth ignores the community foundation as a source of revenue in 2010. We have not argued that the “fund balance utilized” will be replaced. We understand and assume that the “fund balance utilized” will be “unavailable in subsequent years.”
Ms. Louth says that “any fund balance utilized that is not replaced is essentially a one time revenue source unavailable in subsequent years.”
What is the purpose of this statement?
These are the kinds of statements that we would expect from the other campaign teams, not the CFO of West Windsor Township. This last statement responds to our political stance. These two last statements are argumentative. Being argumentative in this context, they are purely political.
The statements constitute the illegal use of Township staff and taxpayer money to the advantage of the Mayor’s campaign to the detriment of our campaign.
Ms. Louth says that “approximately 30% of the proposed $2.45 million “return of surplus” will benefit non-residential (commercial) taxpayers.”
This statement is truthful.
Another truthful statement would be that “approximately 70% of the proposed $2.45 million ‘return of surplus’ will benefit residential (not commercial) taxpayers.
What is the purpose of Louth’s statement? The statement appears intended to divert attention from our focus on voters. This is the kind of statement that we would expect from the other campaign teams, not the CFO of West Windsor Township.
The statement responds to our political stance. The statement is argumentative. Being argumentative in this context, it is purely political. The statement constitutes the illegal use of Township staff and taxpayer money to the advantage of the Mayor’s campaign to the detriment of our campaign.
Ms. Louth says “if the proposal is implemented, the impact(s) on the 2010 Municipal Operating Budget and overall financial position of the Township would likely be as follows: Total depletion of fund balance. The Township will only have an estimated $3.6 million in fund balance to support the 2010 Municipal Operating Budget. This is a reduction of 44.8% from the proposed $6.65 million utilized to support the 2009 Municipal Operating Budget.”
The headline is “Total depletion of fund balance.” The supporting statement is that “The Township will only have an estimated $3.6 million in fund balance to support the 2010 Municipal Operating Budget. An “estimated $3.6 million in fund balance” is not “total depletion of fund balance.”
Ms. Louth says “if the proposal is implemented, the impact(s) on the 2010 Municipal Operating Budget and overall financial position of the Township would likely be as follows: 23.7% increase in the municipal tax rate. From the proposed 29.1 cents to an estimated 36.0 cents.”
This is the first time that we have heard that the Administration is projecting an increase of its proposed 33.1 penny rate for 2009 to a 36 penny tax rate for 2010. That would be a 2.9 penny, 8.8% increase.
This statement misrepresents the truth. The statement suggests that we would replenish the excess reserves that we are proposing to take down.
We have not proposed replenishing the excess reserves. Our assumed increase in the tax rate for 2010, solely for purposes of projections, is 2 pennies. A 2 penny increase would bring the budget to 31.1 pennies. A 2 penny increase would be a 6.9% increase. A 2.9 penny increase would bring the budget to 32 pennies.
The 2.9 penny increase being suggested by Ms. Louth would be a 9.1% increase. Our assumed 2 penny projected increase is less than the Administration’s assumed 2.9 penny projected increase. The Administration’s assumed projected increase is 45% higher than our assumed projected increase.
The headline is “23.7% increase” when the truth is that we assume for projection purposes (not propose) a 6.9% increase. The headline implies that we are going to increase the tax rate “From the proposed 29.1 cents to an estimated 36.0 cents” when the truth is that we assume for projection purposes (not propose) a 31.1 pennies from 29.1 pennies.
We are projecting a 6.9% increase from a lower base of 29.1 pennies when they are estimating a 9.1% increase from a higher base of 33.1 pennies. Our projected 2 pennies would be a 6.0% increase measured against the 33.1 base. Their projection of 2.9 pennies would be a 10.0% increase.
This is mathematical gamesmanship. This is lying with statistics. This is argumentation. This is political discourse.
This should not come from the Township CFO. This should be coming from Mayor Hsueh’s campaign. This is the illegal use of Township staff and taxpayer money to conduct the Mayor’s campaign.
Ms. Louth says “if the proposal is implemented, the impact(s) on the 2010 Municipal Operating Budget and overall financial position of the Township would likely be as follows: Failure to comply with State-Mandated 4% Property Tax Levy Cap. An estimated $3 million in direct service-related cuts would be required for 2010.”
The headline “Failure … Cap” is pure fabrication. The “estimated $3 million in direct service-related cuts” is pure fabrication.
We have said nothing about cuts for 2010. We assume compliance with the cap.
This is another example of a failure to give us credit for our proposal to bring in revenues through a nonprofit community foundation.
This is argumentation. This is political discourse. This should not come from the Township CFO.
This should be coming from Mayor Hsueh’s campaign. This is the illegal use of Township staff and taxpayer money to conduct the Mayor’s campaign.
Ms. Louth says “if the proposal is implemented, the impact(s) on the 2010 Municipal Operating Budget and overall financial position of the Township would likely be as follows: Less interest income generated from low or no fund balance.”
This is a truthful statement, as far as it goes.
The statement is a fabrication in its reference to “low or no fund balance” rather than “adequate” fund balance.
The Standard & Poor’s term is “adequate” or “good” for the amount of fund balance we’ve been projecting. The Standard & Poor’s guide to “Available Fund Balance” is as follows: *
Low Below 0%
Adequate 1% to 4%
Good 4% to 8%
Strong 8% to 15%
Very Strong Above 15%
*Source: “Public Finance Criteria: Key General Obligation Ratio Credit Ranges – Analysis Vs. Reality,” April 2, 2008”
This statement of Ms. Louth’s pertains to the question of the “savings” versus “cost” of the Triple A rating. This statement also pertains to the question of the “savings” versus “cost” of a Single or Double A.
Our analysis shows that the cost of a high fund balance is $214 for a $44 savings. This statement of Ms. Louth’s does not address the savings to taxpayers in addition to the “cost” of “less interest income generated from low or no fund balance.”
This is another example of lying with statistics. This is another example of changing the discussion from the points that we have raised.
This is argumentation. This is political discourse. This should not come from the Township CFO.
This should be coming from Mayor Hsueh’s campaign. This is the illegal use of Township staff and taxpayer money to conduct the Mayor’s campaign.
Ms. Louth says “if the proposal is implemented, the impact(s) on the 2010 Municipal Operating Budget and overall financial position of the Township would likely be as follows: Reduction in the Township bond rating. This will result in the Township having to pay higher debt service costs and force an additional annual increase in Municipal Operating Budgets.”
The headline states the truth. The statement that “This will result in the Township having to pay higher debt service costs” is true.
The statement that this will “force an additional increase in Municipal Operating Budgets” is redundant of the first statement” and misrepresents the truth to the extent that it implies that the Municipal Operating Budgets will increase more than the increase in debt service costs.
What is its purpose since we have conceded that there will be an increase in these costs, given our position that taxpayer costs will go down in the aggregate?
In fact, we have argued that a reduction in the bond rating will lower taxpayer costs in the aggregate. The statement does not address our position that the reduction will lower costs.
The statement implies that the reduction is “bad” when we have said that it really is “good.” This is an accurate statement with a misleading implication.
This is another example of lying with statistics. This is another example of changing the discussion from the points that we have raised.
This is argumentation. This is political discourse. This should not come from the Township CFO.
This should be coming from Mayor Hsueh’s campaign. This is the illegal use of Township staff and taxpayer money to conduct the Mayor’s campaign.
Ms. Louth says that “the ‘$2.45 million extra surplus cost, an extra $214 in taxes’ included in the proposal for 2009 could end up costing the average household an estimated $379 in 2010 with no fund balance reserve available for subsequent years. This will result in an overall weaker financial position for the Township, higher tax increases for taxpayers and/or significant service cuts for residents in 2011 and beyond. An attempt to downgrade the Triple A rating to a Single A will also eliminate the prospect of future debt service cost savings.”
The statement “The ‘$2.45 million extra surplus cost, an extra $214 in taxes’ included in the proposal for 2009 could end up costing the average household an estimated $379 in 2010 with no fund balance reserve available for subsequent years” is speculative and misleading.
The “could end up costing” statement is speculative. The statement is based on assumptions that have not been disclosed to us.
What is the basis of the cost of “an estimated $379 in 2010?” What is the basis of the speculative “no fund balance reserve for subsequent years” statement?
The statement “This will result in an overall weaker financial position for the Township, higher tax increases for taxpayer and/or significant service cuts for residents in 2011 and beyond.” is an assertion, not speculation, that is a political scare tactic. Use of the word “will” is assertive.
It is true that the Township will have an overall weaker financial position, but we are talking about maintaining an investment grade level rating and at least “adequate” strength according to Standard and Poor’s.
The statement that this “will result in … higher tax increases for taxpayers” is pure fabrication. [Emphasis added.]
The statement that this “will result in … significant service cuts for residents in 2011 and beyond” is pure fabrication. [Emphasis added.]
The statement “An attempt to downgrade the Triple A rating to a Single A will also eliminate the prospect of future debt service cost savings.” is an assertion, not speculation, that is a political scare tactic. Use of the word “will” is assertive. The statement “will also eliminate the prospect of future debt service cost savings” is pure fabrication.
The statement ignores our statement that the downgrade will reduce taxpayer costs in the aggregate. The statement shifts the discussion from the issue we have raised.
This is argumentation. This is political discourse. This should not come from the Township CFO.
This should be coming from Mayor Hsueh’s campaign. This is the illegal use of Township staff and taxpayer money to conduct the Mayor’s campaign.
Finally, let me just sum up by saying that, for average evaluation residence of $549,”000, the immediate savings is $219.60 ($5490 hundred dollars x $0.04 /hundred dollars). My intent is to remove the 4 cents permanently. It’s an annual savings since it doesn’t come back. Louth’s intent is that the 4 cents comes back in taxes the next year, plus a new additional tax is added.
