Tuesday, October 22, 2013

The Wiley Coyote deconstructs legal costs under Mayor Zimmer

The Wiley Coyote weighs in with an analysis on Hoboken legal costs


Good people of Hoboken,

We’ve heard about skyrocketing legal costs ad nauseam from the enemies of Zimmer, and will likely hear more at tonight’s debate.

I thought I’d have a look at past years expenditures for comparison. It is important to remember that one cannot simply look at dollar amounts year to year, but must at least allow for inflationary pressures or, better yet, to look at line item spending as a percentage of total spending. This way, you can see if indeed spending in one area is increasing relative to other areas.

In the matter of legal expenditures, that line item averaged 1.5% for the ten years preceding Mayor Zimmer’s term. In her first four budget years, it has averaged 1.6%. The highest percentage of spending on legal costs, 2.1% in 2011 (largely the result of huge costs incurred by the hospital bankruptcy), was only slightly higher than that of the Russo administration in 2000 (1.9%).

The takeaway is twofold: relative to total spending, legal expenditures under the Zimmer administration are in line with previous administrations over the prior decade, and – perhaps more importantly – are a relatively small percentage of total spending, certainly not worth so much attention  when so much more is spent elsewhere. In fact, were the city to spend NOTHING on any legal representation whatsoever (and that, of course, is entirely unrealistic), the city’s tax levy would drop less than 4%, and the property owner’s total tax bill, which includes school and county taxes, would drop about 1%. All this noise about legal spending is pure nonsense, and is evidently the best the Mayor’s opposition can do in light of her multi-year tax decreases.

[Year 2010 appears twice, as there was a fiscal year 2010 budget and a six-month, transitional year 2010 budget]

Eric Kurta, aka estevens aka Wiley Coyote