The city of Miami can’t seem to buy a break. And with a $40-million hole in its operating budget, the city can’t buy much of anything else.

Miami-Dade Circuit Court Judge Abby Cynamon dealt the city its latest setback on Monday. She ruled that City Manager Johnny Martinez did not have the authority to invoke a state of “fiscal urgency,” which would force the unions back to the negotiating table to help balance the budget. Otherwise, the city can impose layoffs and dial back pension benefits as it did two years ago. (Last year, the city and unions worked somewhat cooperatively to help close a $61 million gap).

Tuesday, the city appealed the ruling to the Third District Court of Appeal.

Judge Cynamon’s finding handed a victory to Miami’s police union, which sued — and is loathe to make any more concessions out of its well-padded contract agreements.

All this comes as the city tries to soft-pedal its way out of a stiff penalty that could be imposed by the U.S. Securities and Exchange Commission. The city faces the possibility of civil charges for, the SEC says, misleading investors before two bond issues. By allegedly shifting millions of dollars from a fund of highly restricted impact fees into general revenue, the city made its finances look better than they were. Earlier this month, city officials said they would accept a published reprimand for making the dubious budget transfers in 2007 and 2008. Sounds like the city’s hoping to avoid fines and get, basically, a slap on the wrist. The SEC has been mum about this wishful thinking.

In addition, the city is offering to consider restructuring its finance department and creating more detailed procedures for budget transfers.

Consider? It’s time for city leaders to confront the very real problems that are keeping the city mired in troubling budgetary straits. Like many other municipalities in South Florida, Miami’s revenue took a big hit when the real-estate market tanked. Property values plummeted, and with them the take from ad valorem taxes. But not everything can be blamed on the economy.

The city has some long-abiding problems in how it handles its money, how it behaves in a financial crisis. For instance, the city saw a slight increase in property-tax revenue this year. But instead of holding the millage rate steady, city commissioners reduced it at a time when the city needs every penny it can get. Clearly, politics overrode common sense.

Miami has been down these treacherous roads before, raiding reserves, subsidizing services that residents should pay a little more for, while refusing to impose anything that looks like a tax. Plus, this is the second time that the SEC has investigated the city’s actions. In 2001, the agency determined that Miami shifted money from the capital budget to fill holes in the general fund. City officials then issued $116.5 million worth of bonds, including one bond issue to help cover pension costs.

A judge subsequently issued a cease-and-desist order banning Miami from controversial budget transfers. Did it not get the message? This does damage to the city’s credit — and credibility.

Mayor Tomás Regalado, who inherited the SEC mess, says he has every confidence in his city manager and the new finance team that he is assembling. There’s a new chief financial officer, and a new finance director came on board a few months ago. Fine. It’s imperative that the city stop the shell games, and take a more-responsible route to financial stability.