WPCNR CITY HALL CIRCUIT. By John F. Bailey. September 28, 2008 UPDATED 11:59 A.M.: On a day when the Dow Jones Industrial Average declined 777 points, the largest decline in the market since 1987, and when inflation is taken into account, almost equaling the dollar value lost in one day that was lost by investors in the five days of the 1929 Stock Market Crash, (October 24 through October 29), the City of White Plains which has budgeted about $1.5 Million in interest income into the 2008-2009 budget of $161 Million, said the city funds investments appear in good shape at this time.
Monday, White Plains Chief Financial Officer, Gina Cuneo-Harwood issued this statement: “There has been no changes in the Federal Fund Rates since May and the money is coming in as expected. It is too early to tell what might happen.”
"Bailout Monday," the day when congress was supposed to "bail out" the financial crisis of the last two months, but did not, is being called the largest one session decline in the history of the Index, but it is equal only in decline when dollar value is considered.
WPCNR notes that Monday's stock market decline almost equals the 1929 Black Tuesday crash when inflation is taken into context. The stock market lost $1.1 Trillion in stock value on Bailout Monday, roughly the outer limits of what the bailout was predicted to require.
The $1.1 Trillion loss in vallue is 10 times the 5-day beating started by the October 24 through October 29, 1929 Black Tuesday, 79 years ago, when the stock market, declined 69 points from 299.6 to 230.7. That precipitated a decline in value by November of 1929 of $100 Billion 1929 Dollars.
Today, that $100 Billion in losses experienced in five days 79 years ago is equivalent when 79 years of inflation is taken into account to $1.2 Trillion in 2008 dollars. That is just just 100 Million more than the trillion-one lost yesterday in the stock market.
WPCNR has also posed the same question through Westchester County Department of Communication to County Executive Andrew Spano, as to whether the Westchester County projection of $7.5 Million in investment income in their revenue budget was holding up, up, or down and by how much.
Mortgage tax, the county has previously disclosed and reported by WPCNR first two months ago, is down 30%. The County budgeted $28 Million in mortgage tax in 2008. The City of White Plains budgeted approximately $4 Million in mortgage tax.
Decline in projected figures affect the city in this way, according to the city's previous Executive Officer, George Gretsas: for every million dollars of revenue decrease, the property tax would have to be increased 3% to make up the difference.
Sales tax figures for the first quarter are not in yet and are expected within the first 10 days of October. The City has budgeted $45 Million in sales tax, and expects to easily clear that in 2008-2009 due to the 1/4% increase in the city sales tax to 8-1/8 per cent, expected to add $5.6 Million to the city sales tax revenues. However, most of that $5.6 million surplus from the 1/4% would be spent in the expected settlements to police, fire, teamsters and Civil Service Employees, if as expected wage increases of 4-1/2 to 5% are demanded and granted by the city.
The City, anticipating possible sales tax shortfalls due to a sluggish economy last fall had pushed the Democrat-controlled council and Assemblyman Adam Bradley for a 1/2% increase in the sales tax giving the city a base. That was denied by the Democratic Council, and Mr. Bradley was sent to Albany to request only a 1/4% increase.
The two senior members of the Common Council, Rita Malmud and Council President Benjamin Boykin have so far not replied to WPCNR's question of whether the Common Council will convene and call for a look at current expenses with the Mayor to save more money out of the current 2008-2009 budget over the next three quarters of this fiscal year.
The School District is closed Tuesday, and WPCNR will be asking them Wednesday if they are contemplating going out early for municipal bond offerings, now gaining in attraction. (The School District needs to bond $16 Million to complete its construction projects and approximately $10 Million for possible certioraris.) The question has already been posed to the city.
