The Fog of Olive's Budget

Berndt Leifeld, Town of Olive Supervisor, released the Town of Olive budget today in the Town of Olive office in West Shokan, next to Davis Park. Several members of the Town of Olive Republican Committee were present as well as Mr. Leifeld (D), Town Clerk Sylvia Rozelle (D), Town Boardsmen Peter Freidel (R)and Bruce LaMonda (D), and several concerned citizens.

In 2004 Errol Morris released Fog of War, a two-hour interview of Robert McNamara (D), co-architect of the Vietnam War. The term "fog of war" relates to the inability of military commanders to avoid error. Even the best general will inadvertently lose men because of tactical or strategic blunders.

When it comes to government budgets, there is a different kind of fog from the fog of war. In a military setting, fog is unavoidable because it results from the technical, perceptual and other difficulties associated with the use of military violence. In the case of government budgeting, the fog is deliberate. Both parties have budget fog machines that blow aplenty so that budgets barely can be seen, and the Town of Olive is no different. Berndt Leifeld and his Democratic colleagues are ethical and act in good faith within the boundaries that government permits. Mr. Leifeld and Mr. LaMonda were supportive of questions and forthright in their answers. However, the fog has set down.

In particular, and this is consistent with required practice, the amount of reserve dollars on deposit is not mentioned. I am told that the amount of reserves that the Town of Olive is holding is allegedly in the seven digits, as much as two thirds of the Town's total tax bill of $3.3 million. This would be astonishing if true. We are in an environment where holding cash poses long term risks. Interest rates are at all time lows. The Federal Reserve Bank has taken a potentially inflationary stance, doubling the nation's bank reserves a year ago. Although deflation is possible, large cash positions are as much a crap shoot as investing in commodities.

Mr. Leifeld indicates that interest rates on the reserves are down 95%. According to the revenue line item "interest and earnings" on page 18, the amount fell from $28,000 to $5,000. Is this the time to be holding a cash surplus instead of cutting taxes? Usually, investors look for high returns, not low ones.

The budget indicates a reduction in expenditure on buildings from $69,000 to $52,000. This may be a costly reduction. If buildings are not maintained, then they have to be replaced. For too long the State of New York has allowed infrastructure to deteriorate while it has played budget games, squandering future generations' birthright for short run political gain and self indulgence. It would be a pity if the Town is saving $17,000 and in exchange spends millions to build new buildings.

The construction of new buildings in the coming years hardly makes sense. It is much better for the environment and more cost effective to rehabilitate existing structures, to include new extensions, rather than greenfield. Should the town be charging ahead with (a) current high tax rates while (b) cutting services simply to (c) build new town offices?

Although appropriations for highway general repairs are increasing by $276,212 or 4.6%, I am told that not all of this year's budget has been spent. Allegedly, the highway department was told that it must not use the full budget for this year but rather return funds of as much as $200,000 to add to the new building reserve fund despite deteriorating roads. For example, Piney Point Road is a roller coaster at the intersection of Route 28.

The budget reports that personal services costs for the Town Board, Justices, Town Supervisor, Assessors and Town Clerk, have increased. This is puzzling beause according to the Democratic Party media we are in a deflationary economy. Are we mixed up, or is it the New York Times, which keeps talking about recession, depression and deflation? If there's deflation, why are costs rising? And if there's inflation, why did the Democrats spend $5 trillion on bailouts, handouts to the ultra-rich.

Mr. LaMonda states that Workers' Compensation costs have escalated due to increased claims. Mr. Leifeld notes that the Town highway employees' labor agreement forces a four percent wage increase that is unavoidable. But social security is not going to increase this year, and low-income retirees cannot necessarily afford new Town buildings.

Town of Olive Republican Caucus

I attended the Town of Olive Republican caucus yesterday, the purpose of which was to nominate candidates for Town office. I do not know if this is a national trend, but the meeting was very well attended. There were 70 to 100 people there compared to a usual turnout at committee meetings of ten or fewer.

The issue at hand was whether the Republicans would nominate an incumbent Democrat, Berndt Leifeld, for Town Supervisor on the Republican ticket (Leifeld already runs on the Democratic ticket). Another Democrat also sought the nomination, I suspect as a matter of opposing Leifeld. He had threatened to seek the Republican nomination also unless the nominations were limited to existing Republicans.

This is a kind of paradox. It seems to me that the interest in the Republicans was largely stimulated by a conflict among the Democrats. Someone did say that he had attended because of his concerns about the big government trend in national politics. I am not certain how far that sentiment goes and I am not certain how far the attendance simply reflected interest in the possible conflict between the two Democrats. I think many of the attendees may have been Democrats, but I'm not positive.

In any case voting was closed to Democrats, that is, only Republicans voted, and it seemed to me that about 30 or 40 people voted, which is still a good turnout. Pete Freidel, currently a Town board member, won the nomination for Town Supervisor. As well, the Republicans nominated a full slate of candidates for Town Justice (I recall it was Earla van Kleeck who was nominated), as well as Cindy Johanssen for Town Clerk and the Republican Chair, Chet Scofield, for Highway Supervisor and Don van Buren was nominated as well.

Nina Postupack, the County Clerk, spoke to the meeting. She has done an excellent job at the County level and is one of the highest ranking elected Republicans in Ulster County.