The other day Chris Wetterich, one of my favorite reporters, innocently posted this image on Twitter with the following text: A chart showing why City Manager Black believes Cincinnati can borrow a whole lot more $ 2 fix fleet & streets
– Prompting me to immediately go into an apoplectic Tweeting frenzy. It was so embarrassing. In a matter of minutes I tweeted five times, each comment more outraged than the last, going off in all kinds of directions – and all the while, Chris trying to remain his calm, professional self. “I guess I don’t understand what you’re asking,” he replied. But I couldn’t help it. The very sight of that damn chart infuriated me on such an instinctual, gut level, in ways I could never clarify in 140 character bursts.
So let’s try here, shall we?
1. City Council should pass a motion requiring any city administrator who ever wants to use a chart that predicts the future to balance that illustration with a chart depicting actual results for the same number of years in the past. Mr. Black’s chart shows projected tax supported debt service figures for the next 23 years. Give me a chart that shows the same information from 1992 to the present. My guess is that we would see almost mirror images, but bars climbing in the opposite direction, that we are close to an all-time peak in terms of borrowing and debt service. Thus the need for raising the city’s debt limit in order to fix the fleet and our streets.
Of course, this type of chart would be a lot of work for administrators in Budget & Finance as some already over-worked human being would have to go in and pull numbers year-by-year. We don’t value historical data (our report card) enough to put it in a readily usable form at City Hall.
How can we possibly evaluate what works and what doesn’t in terms of public policy if we continue to stubbornly refuse to look at the past? Our record of predicting the future has been dismal (casino projections, stadium projections, need for retail anchors on 4th St., etc, etc, etc.) The past, however, is easily quantifiable and we can learn a lot from it. That is, unless we prefer to continue to make our decisions based on wishful thinking.
2. Debt is risk. And we don’t need any charts to see that Cincinnati’s debt load has increased exponentially over the last decade. New office towers. Rehabbed hotels. Parking garage after parking garage after parking garage. Cranes everywhere. It’s fun. It’s exciting. And none of it was paid for with cash.
Of course a lot of that is not city debt that shows up on our books. But if we learned anything at all from the Great Recession of 2008, the economy is an ecosystem in which all of us are inter-related. Weakness in one part of the system impacts the whole. While the future has too many variables to reliably predict, we do know with absolute certainty that we will experience disruptive economic problems about once a decade. The Tax Increment Financing we’ve used to pay for major developments across the city is a grand experiment we’ve never tried before, especially not on the current scale. We have no idea what can happen if our rosy projections about parking revenue or demand for commercial office space turn out to be too high. Whereas we used to do 3 or 4 major projects a decade, now we approve more than that every six months Yet I’ve never once heard a serious discussion about risk, what could go wrong, what’s our Plan B at any of the countless meetings I’ve attended on development – and that terrifies me.
Let’s assume that the rest of Mr. Black’s presentation was more nuanced than his chart. He’s a smart man. But please, please, please Cincinnati – please don’t think a steeply declining bar chart means more borrowing is an easy answer. We will have problems no one can foresee. Are we ready? Do we have any cushion? Or will our new tolerance for risk and public subsidy lead to financial repercussions that flow through our local economy like a fragile house of cards?