There's never a good time, and there's never a good way, to raise taxes and fees.
Raising taxes on those with fixed incomes or low incomes is unconscionable. Raising taxes on middle income families just squeezes them harder. Increases on the wealthy, we're told, are just a form of class warfare.
Beyond that, if business is humming along with strong growth, many will complain that increased taxes will ruin the economy. In difficult times, the same people will point out that a tax increase could be the straw that breaks the camel's back.
In specific cases, more specific complaints are found. Mayor Don Ness found this out when he recently proposed a $9.70 monthly fee increase for all city sewer customers, and additional sewer repairs likely to cost from $2,000 to $10,000 for many of the same people. These expenditures are meant to pay for more than $60 million in fixes to Duluth's sewer overflow problem, a project insisted upon by the Environmental Protection Agency.
There was a litany of complaints about the proposal. Some, including city councilors Jim Stauber, Todd Fedora and Greg Gilbert, and Andy Peterson of the Duluth Area Chamber of Commerce, complained about fairness. Their arguments are accurate (although not the whole story), since under the Ness plan many residents would have their costs reimbursed by the city, while others would have to bear the burden themselves. In addition, the $9.70 fee would apply equally to the large sewer user and the small.
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There is never a good time, or a good way, to raise fees and taxes.
The other side of raising taxes is cutting spending, and some councilors have consistently said that cuts need to be made before taxes are increased.
Councilor Fedora has vehemently made that argument since he was elected, complaining strongly about city expenditures on housing, the sister city program and high speed rail.
When Mayor Ness said he "inherited" a $5 million budget deficit, Fedora retorted that we've been "pissing away" money in the city for years.
What Fedora has not effectively done, however, is explain how minor peripheral expenditures -- even a lot of them -- can add up to the tens of millions needed to finance both the deficit and the sewer fixes that are necessary. The housing expenses, sister city program, and high speed rail monies mentioned above total only about $700,000 this year, and they haven't been permanent budget items. Beyond that, they all promise to add at least some revenue to city coffers, so long-term savings are questionable. If these minor areas are the only kind of cuts Fedora is pushing, then he doesn't offer us much hope for big budget solutions.
If Duluth wants to avoid tax increases through cuts, then trimming away at the edges won't do. Instead, the major areas in the budget -- police, fire and public works -- need to be cut too. Those large departments are just the sort of "core services" that many, including Fedora, say need to be maintained.
Nonetheless, councilor Stauber has rightly pushed for a comprehensive study of the fire department, to see whether a reorganization of that department might bring savings.
He's also pushed for the city to get a better handle on its overtime costs (largely in the police and fire departments), which can run in the millions. In reality, Stauber seems to be looking for better management, and that is to be commended.
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Unfortunately, there is no guarantee that a study of the fire department would lead to obvious cost savings, or that overtime costs can be easily reduced in a city that hosts major events such as Grandma's Marathon. Worse, those types of cuts are already being made simply to cover the city's current $5 million deficit. Paying for sewers with savings seems to be little more than a chimera.
By the time this article is published, the council may have approved a version of Mayor Ness' expensive-but-necessary fix of Duluth's sewer overflow problem, or they will again have put this off.
Whatever the council does, it needs to approve the Ness plan -- or a better one -- sooner rather than later.
There is never a good time, and there's never a good way, to raise taxes and fees. However, if it has to be done, get it over with. We can dream, but there will never be a better time.
Pete Langr lives and works in Duluth. He may be reached at petelangr@msn.com . Langr writes once a month for the Budgeteer.
