Time to Raid the Rainy Day Fund

The town manager of East Greenwich is proposing a 4.7 percent tax increase in order to avoid dipping into the town’s fund balance—that’s government-speak for a municipal savings account. Now, one of the main reasons for this account is for emergencies. Geez, if the economic and fiscal crisis doesn’t count as an emergency, then what does? So why is the town manager afraid to touch this fund? Because the more cash the town keeps in there, the higher its bond rating. So let’s see if we’ve got this right: the town manager wants to raises taxes, forcing you to dip into your savings, so the town doesn’t have to use its own savings, so it can borrow more money in the future—costing the average homeowner in East Greenwich about $343 more in taxes every year. For more, read The Providence Journal story.

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