Search DC's Musings

Monday, August 2, 2010

City Budget Decisions: It's Deja Vu All Over Again

Yogi Berra, famous for his malaprops, infamously said "It's like deja vu all over again." That sums up perfectly the City of Long Beach budget process that is now underway. And probably the budget process of most cities across the state and many across the country. With just two changes, for the council members from the 7th and 9th, I could just repost the piece I wrote last September, "Dear City Council, Fix It" and once again follow up with "How To Crush Budgets: The Median Income Spiral" because nothing has really changed structurally or politically in Long Beach. To update for the current council from last year's district by district analysis I would say no real change in the 7th and a big change in labor's favor in the 9th. Not good news for residents looking for real shifts in fiscal policy at City Hall.

Last year I said that until the City Council addresses the pensions and benefits for public employees we can expect to read about the City of Long Beach facing another $20 million deficit next year. I was off by $1.5 million as the City must deal with an $18 million deficit. Despite the calls from 3rd District Councilman Gary DeLong last year there has been no movement to reign in the spiralling pension and benefit costs for the city. As a result next year at this time I will be writing about the City of Long Beach and its $20 million deficit.

Last year's budget was presented and passed with the hopes that the City could renegotiate with the various unions that represent almost all workers, from public safety through Parks & Rec. While there were some minor concessions made in negotiations earlier this year the golden eggs were not touched nor discussed. With no real change in the composite of the City Council and their dependence and favoritism to the public employees' unions we can expect no real change in the structural deficit our city faces due to growing pension and benefit contributions and payments.

While pay increases have been postponed under recent negotiations, at some point those postponements come due. As I wrote in "...The Median Income Spiral" when the pay raises are due to kick in the City will continue to use the formula of basing our employees' salaries on those in surrounding and like sized departments and populations. Ask the cities who have the City of Bell in their median income pool how that will go for them. Because of the formulas used to determine salaries and benefits, Long Beach continues to facing growing spending and deficits until the City Council directs the City Manager to re-open all city contracts and renegotiate them from top to bottom.

Meanwhile Mayor Foster and City Manager Pat West have presented their budget to Council and workshops and budget sessions have begun to debate where to slash spending to make up the $18.5 million gap. This past weekend the Press-Telegram published 43 budget questions for readers to answer with a simple "Yes" or "No" regarding budget cuts. (It is also on-line for those who wish to chime in: "How Would You Cut Long Beach Budget")

Thanks for asking but I would have answered anyway. As I have stated in the past the primary problem our country faces when it comes to governance is no vision and no over-riding philosophy of the purpose of government at each level. For Long Beach I believe the most basic purpose of the city government is to protect persons and property, to provide services that provide for the safety of the citizens, to build and maintain the infrastructure necessary to support neighborhoods and business districts, to provide limited services that promote the general welfare of all citizens, such as libraries. According to my perceived purposed of city government the budget should focus on public safety, which includes not only police and fire but also life guards, park rangers and crossing guards; city inspectors for buildings, health and code enforcement; maintenance crews to repair city streets, sidewalks, sewers, water lines and public parks and buildings; public libraries, parks and recreation. Since our City has a Health Department which keeps us somewhat independent from the County it would also by a budget priority. Once those budgets are properly funded and secured if there is any funding left over then the City can consider temporarily funding other services and programs that have mushroomed over the year. Do we really need a Human Dignity Officer and staff? A Mobility Coordinator? A Sustainability Office? Do we need to spend millions of dollars on bike lanes? Do we really need both a Civil Service Department and a Human Resources Department? How many departments and personnel do we have that are feel-good departments that cost money that should be used elsewhere?

Unfortunately I have little faith in our current City Council to make the necessary cuts and give the necessary instruction to fundamentally change the budget of our city. The majority are beholden to public employees for their positions, current and future when they seek higher office, and that eliminates fundamental changes in contracts with city employee unions. The majority are of a particular ideology that the purpose of government is too provide seemingly infinite services to mostly poor residents rather than attracting business, economic development and new home owners to stabilize neighborhoods. They would rather perpetuate the pockets, growing, of poverty that attract more crime, more public service dependent residents and more poverty. Instead of developing a long term economic plan to provide for more private sector jobs the City Council has decided a major public works project requires a Project Labor Agreement to drive up costs against a deficit budget and restrict employment in an almost 20% unemployment community.

My expectation is that City Management will not be scaled back, union contracts will not be renegotiated, and we will face another $20 million or more deficit next year. And the year after. In 2012 we will have another election, this time for the even Districts, and the same general ideology and fiscal policy mentality will remain. And City residents will complain about what programs are being cut after essentially electing the same politicians cycle, after cycle, after cycle.

Visit the Press-Telegram site and cast your votes on what should be cut, but don't expect much in the way of results. Our City Management and Council don't have the stomach for them, results that is.


1 comment:

Bob Schilling said...

We all share frustration with the deficits faced by state and local governments. Your baseline priorities make lots of sense. In hard times, I'd rather have cops than Mobility Coordinators. And there's little question that some pension benefits seem to have gotten out of hand.

The problem with pension benefits is that, short of a major -- and unlikely -- renegotiation, the city can't affect its short-term costs. The primary beneficiaries of the benefits are long-term city workers, who are also well-represented in the ranks of union leadership. They're unlikely to agree to changes that will affect their own benefits.

I don't think this is just a matter of political courage, though a little of that might be useful. None of the choices before the City Council is pleasant. All of them will lead to a reduced quality of life for some group of people. What seems a frivolous service to you or me may look essential, for example, to a wheelchair user who won't be able to get a ride after we fire the Mobility Coordinator.

And in the long run, what we're witnessing is the slow decline of the United States into a second-class country. It's satisfying to talk of defeating arrogant unions. But we're also talking about continuing and accelerating the decline of America's middle class. Remember when ordinary industrial workers could retire comfortably on their pensions? No more. Remember when a single worker could provide a modest living for his or her family? Those days are past. At the rate we're going, we're going to meet India one day as their standard of living rises and ours declines.

So let's all cheer for salary cuts. Let's denounce the recalcitrant unions and their inflated retirement packages. Let's beat down our labor costs. And then let's cry in our beers about the decline of the American worker, their consistent pessimism, their unwillingness to spend much, and the stagnation of our economy. We can notice that corporations earn more every year, while the people who labor for them seem to earn less.

And when we're done, perhaps we should ask if their isn't a better way....