So what lessons can we learn from the Ted Hults/ Bill McGintee/ East Hampton financial collapse episode?
We’re reluctant to say that public officials should not be trusted with large sums of money, but what we have seen unfold here in the past year only justifies the skepticism the people have for their government. Motivated by power, greed or sheer incompetence, our elected and appointed officials are more often than we care to imagine guilty of abusing their authority.
In the case of East Hampton, the effort to deceive the public was driven by a need for elected officials to stay in power. Year after year budgets were presented that artificially kept tax demand down in an effort not to anger the voting public. At the same time, a demand for funds for employee wages, retirement and services continued to escalate. The town was presenting a false sense of financial stability so elected officials would continue to get elected while expenses flew out of control and revenues failed to meet the needs. It became so desperate that money dedicated to the Community Preservation Fund and capital funds for the Montauk Playhouse were redirected to help prop up the general fund — $12 million worth.
It is a disgraceful practice, carried out, we imagine, in many governments regularly; but not usually with such disastrous results. Some governments may actually be able to get away with this shell game when someone with a finer hand is at the controls. That was not the case in East Hampton.
Among the lessons here is that all governments — whether they be municipal such as villages and towns, or even school boards — need to be aware that the services and the benefits they promise have a cost to them. Board members and public employees need to understand that they work for the people who elected them and who pay their salaries, and are therefore beholden to those people whose money in the form of tax dollars they manage. The public is a body that needs to see how money is handled in clear and transparent ways, and the impact of decisions made by elected officials needs to be made apparent to the public.
And finally, while the public needs to understand — like officials do — that services cost, they also must ask questions and demand accountability. Because apparently our skepticism is justified.