In conclusion, implementing the irreversible tax freeze will limit the
city’s flexibility and make it hard to predict future revenues.
Adequate reserves are necessary
to protect against such emergencies or strains on the city’s finances
such as economic downturns. Reserve balances are also an important
factor used by rating agencies to determine a city’s credit quality,
which in turn translates to lower borrowing costs.
Future legislative proposals which may reduce the cap in property value
increases would take years to rebuild and regain the prior revenue
stream necessary to provide services to its citizens, comply with
mandates, repay debt, and rebuild services.