By Jeff Balke
By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
By Jeff Balke
"I'll leave the numbers to you, mayor," Kelley said on his way out.
Kelley can be faulted for not bothering to fake an interest in city finances, but his attitude is a common one among councilmembers. Eleanor Tinsley, who's served on Council since 1980, says Lanier has discouraged a strong Council role in the city's budget process. But not many councilmembers would be willing to disagree with the mayor, anyway, she adds.
"We're not doing what we did several years ago, when each of us would choose departments and go into depth and work really hard scrutinizing that particular budget," Tinsley says. "But the mayor has popular support. You can question whether Metro money ought to be spent or some of his other methodology, but the people out there want more police on the street and their neighborhoods fixed up. The mayor's doing what the people want, so therefore he's doing what Council wants."
Blindly granting the mayor a mandate is a hollow excuse to some, who say Council's failure to challenge Lanier on his restructuring of the city's debt and its continued reliance on the Metro subsidy has put the city at great financial risk.
"It's hard to do, because most of the cards are in the mayor's hands," says former councilman Jim Greenwood. "But I think that's one of the most important things a council does, and if you don't monitor the finances, if you don't ask questions, you're not in a position to perform as well."
It has also left the job of opposing Lanier's fiscal strategy to Controller George Greanias, whose stormy relationship with the mayor has made most councilmembers wary of dealing with him.
"Council recognizes that bringing George into their debate will alienate the mayor," says Rice professor Bob Stein. "Their fear is that the mayor controls the departments as well as political patronage and they don't want to mess with him. That's not healthy."
There was a time when Lanier and Greanias engaged in civil discourse on the city's finances. In discussions before the 1991 election, Lanier had agreed with Greanias that costs and revenues needed to be brought into line. But once in office and facing a potential $50 million shortfall, Lanier was reluctant to risk political damage by either cutting services or raising taxes.
So, to fund the key components of his agenda, Lanier needed to get his hands on every dime he could. He did this in three ways:
* Taking a greater share of the percentage of Metro's 1-cent sales tax than approved by voters in 1988 for non-transit needs. Critics -- among the most outspoken are Greanias and state Representative Sylvester Turner, Lanier's 1991 runoff opponent -- are outraged that Lanier would, as they see it, "violate" voters approval of a quarter-cent subsidy for street improvements. In each of the last two years, Lanier has more than doubled that subsidy to pay for street overlays and sidewalks, thus freeing up city money to pay for an expanded police presence.
* Postponing payments on the bond debt authorized by voters in 1991. The result is that in the three-and-a-half years of the Lanier administration, the city's taxpayer-supported debt has increased by $371 million -- more than twice that incurred by Whitmire in ten years.
* Incurring $250 million in additional debt by using unspent bond authorizations left from Whitmire, issuing about $25 million in certificates of obligation and by assuming the debt of areas annexed by the city.
Though stopping payment on one debt while taking on more would seem to be poor financial judgment, Lanier justified it by saying that the money used for infrastructure improvements would increase property values, the city's largest and most stable source of revenue.
But that hasn't happened -- a fact Lanier has been forced to admit this year. His current five-year forecast includes revised projections that show that, by 1998, the city will realize $77.7 million less in property tax revenue than Lanier hoped for in 1992.
"Basically, it's a real-estate deal that hasn't worked," Greanias says of Lanier's over-optimistic projections. "It's like somebody said to you, 'Why not invest with me in this property on the corner of such and such and so and so, and if we put in $5 million, in five years it'll be worth $20 million and we can sell it.'
"But five years down the road it ain't worth $5 million. It's worth less than you put into. That's what happened here."
Greanias says the Lanier administration knew as early as last year's budget debate that enhanced property values weren't going to bail the city out. But when the controller tried to point that out to the Fiscal Affairs Committee and later in his monthly report to Council, he says Fiscal Affairs chairman Helen Huey tried to squelch his testimony.
"She told me I was out of order, that it wasn't part of this month's financial report and therefore I couldn't bring it up," Greanias says. "It's kinda funny. I guess if this month I know that we're going to go in the tank on sales tax six months from now, I can't talk about it because it hasn't happened this month."
Lanier's present budget blueprint, while predictably optimistic, reflects other troubling financial trends. His 1996 budget allows for the same level of city services as this last year. But to accomplish that, Lanier plans take at least $8 million from the city's fund balance -- a pool of cash set aside for emergencies -- to balance his budget. Moreover, after postponing debt payments in 1992, Lanier will be forced to increase those payments over the next couple of years. The result, according to Greanias, is that there will be an actual decrease in money available for services beginning in the 1997 budget year.