Page and Liu Discover City’s Stabilization Account

Mark Page, the dry but not humorless city budget director, has been testifying for two and a half hours in the City Council chambers, mostly defending the mayor’s plan to rescind the $400 rebates and assuring one skeptical councilman that “your premise, that the world ends June 30, 2009, I don’t think is realistic,” and that an eye has to be kept on the city’s long-term financial health.

One notable highlight came when Page, under questioning from John Liu, admitted that by borrowing money from an account previously set aside to pay for future health care costs in effect, the city has created a “budget stabilization account.”

“Are you sure you can even do that?” Liu asked.

“Yes,” said Page.

Liu said the city lawmakers had previously wanted to create such accounts in order to park money and create reserves to prepare for unexpected fiscal downturns. “We just could never do it because it wasn’t legal,” said Liu. “You had to spend the money in the fiscal year. You could prepay the next fiscal year, but you could never actually set up a long-term, budget stabilization account.”

“So,” Liu continued, “have you now figured out a way to get around way that prohibition by using this long-term, retiree health fund to go in and out, to park money temporarily, to take it out later on? That, in itself, has become a budget stabilization account.”

“Yes,” was Page’s reply.

“And you’re OK with that?”

“Yes,” said Page.

When asked if “anybody in Albany” has made an issue about the city’s use of this account, Page said, “I don’t think this is their concern.”

Liu, to some laughter in the audience, congratulated Page for finding “the answer to this puzzle that we’ve long been looking for.”