Saturday, February 13, 2010

Our CIP credit card

John Branston has posted a column on the City's budget woes, "A Primer on Budgeting," in which he says "a government budget has a lot in common with a personal budget or a household budget." So true.

But I think he missed an important part of that analogy.

Just like you or I, the City has a revolving credit card. You might quip that it has been issued by the "CIP Bank." (CIP stands for "Capital Improvements Program.")

Whenever anything is charged to the CIP budget, the City has to go out and sell bonds to get the money. The bonds eventually have to be paid off, but the blow is softened because we're not paying cash.

You and I have figured out that credit cards can be dangerous. They make it all too easy for us to go out and buy things we think might give us an emotional gratification, but, truth be told, we don't really need.

In the current economy, many households are trying to get control over their credit card debt. We're charging less, not more. Many of us paying down our credit cards. Some of us are tearing them up.

But not the City of Memphis, it seems. With our handy CIP credit card, we're buying a new boat dock to nowhere, for riverboats that aren't even running any more. For tens of millions of dollars.

How silly is that?

Please email your City Council members.

Further reading

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