POSTED ON AUGUST 11, 2010:
The Conservative Approach
Although we’re seeing a few gains, we still must proceed cautiously
Over the past several months, a great deal of the news coming out of City Hall has to do with the effects on government services caused by what some call the “Great Recession.”
The effects of this recession are now well-known: cutting personal, cutting services, unfunded liabilities and reduced spending. You have also seen disagreements between my fiscal philosophy and that of some on the City Council. As residents see and feel the effects of the recession on city services, I believe it’s important that our citizens know what my fiscal policies have been and will continue to be during these times.
I believe being a strict fiscal conservative leader is what we need now more than ever. Those who practice fiscal discipline are always challenged by those wanting instant gratification for political purposes. That doesn’t mean we completely stop spending the funds necessary to provide the basic services citizens expect. But it does mean that we can’t let even the slightest improvement in our finances burn a hole in our pocket and hurriedly or with short sightedness, immediately start to spend it.
We must exercise a cautious balance because we have learned how unpredictable an economy can be and how quickly it can change.
It was once said, “Those that fail to remember the past are condemned to repeat it.” The last thing we need to be doing in 2010 is forgetting the lessons in 2009, what didn’t work, and then repeating the same behaviors expecting different outcome.
We have learned that our city fell into the recession a lot faster than it takes to climb out of it. We also learned that our city operations and fiscal plans were not prepared to withstand the effects of the recession on services.
Just because we started a new fiscal year July 1 didn’t mean that the local economy miraculously recovered or that “new money” was now in the bank so that we can go on a spending spree to restore much needed services. I believe with patient discipline, we must move forward to restore the core of our services. Everyone in government is for restoring the core services. The difference of opinions is when and how we do it.
It has been said that necessity is the mother of invention, which in some cases can be credited with driving efficiencies in many operations. We began that process earlier this year with a sweeping efficiency analysis of all city departments. Later this year, we will begin to implement some of the measures identified so that if another wave of the recession comes upon us, hopefully we are better prepared.
We are optimistic that our sales tax revenue will gradually and slightly improve this fiscal year. But we already know that in the next fiscal year, which will begin in July of 2011 that we may have as much as $15 million worth of services that will lose their source of one-time funding. For this reason, it is my view that we should be very conservative and cautious with our spending and not live just for today.
We will also watch very carefully what Congress does later this year when the billions of dollars of tax cuts are set to expire. If Congress does not extend these tax cuts, it will mean that personal and business taxes will go up and any recovery momentum of the economy could stall. That will affect local businesses, local spending and local services.
The last thing that I want to see is another rollback of services because we failed to plan.
Having a budget isn’t the same as having the money to spend. I am aware that there are those who believe if we have the money, let’s spend it now and they disagree with my cautious and conservative approach.
But my duty to you is to keep our city fiscally sound, not just for the next few months but into the foreseeable future.
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