Prattville Practices "Credit Card" Budgeting

Here's a scenario, followed by a question. You have more debt than your yearly income. You're deep in debt. When the time comes to make a payment on your MasterCard, you pay it with the Visa card.

Question: What does this say about you and your finances?

Answer: It means you are far too deep in debt. Using one credit card to pay another, otherwise known as robbing Peter to pay Paul, is one excellent sign of impending bankruptcy.

Enter the Prattville City Council. Last night, the Council voted unanimously to take out a $3.1 million loan in order to make a payment on the $50 million long-term debt from bond issues.
http://www.montgomeryadvertiser.com/article/20101027/NEWS01/10270343/1007/rss02

The Pratt­ville City Council voted quickly and unanimously Tuesday night to take out a short-term loan for $3.1 million.

Mayor Jim Byard Jr. put for­ward the idea for the loan to stay current with upcoming bond payments and ensure the city has sufficient operating funds to get through its leanest part of the fiscal year. The $3.1 million payment is due Monday. The bond was for incentives pack­ages the city used to fuel retail development in east Prattville.

The City is hoping that tax revenues over the Holiday season will be sufficient to pay off the $3.1 million loan. They may be right... But then, what happens if they are NOT right? What will they do, then?

And presumably, the budget they recently passed spends the majority of the expected revenue over the next year, if not all of it. Without reworking the budget to remove $3.1 million in spending, how are they going to balance the budget this year?

This whole thing truly is an "exercise in bad government." Not just on Mayor Byard's part,but also by the entire City Council who ultimately went along with this bad idea.

Shame on you, each and every one.