Virgil Swing: Plan for a future with less money to avoid financial surprises
Thankfully Duluth city councilors went along with Mayor Don Ness on most cuts in city spending he proposed to meet a $5 million budget deficit. The cuts obviously weren't easy for the mayor to suggest or councilors to accept, but their collective...
Thankfully Duluth city councilors went along with Mayor Don Ness on most cuts in city spending he proposed to meet a $5 million budget deficit. The cuts obviously weren't easy for the mayor to suggest or councilors to accept, but their collective actions buy the city some time.
Councilors must also help Ness find $300,000 in cuts or increased income to fill the hole created when councilors rejected on an 8-1 vote his plan to drop one downtown fire rig. The size of the vote suggests this might be an unwise cut, but keeping the rig will require trimming elsewhere.
However, neither the mayor nor councilors should think these actions will solve the city's long-term financial woes. Even the mayor's wise decision to beef up the city's budget reserve at a time of money woes won't get the city in the financial position it should be in.
When the immediate budget dilemma is solved, the mayor and councilors should brainstorm ways to cut city spending in a more permanent way. Some of the cuts already voted on (like ending tourism-tax subsidies to the Great Lake Aquarium, Grandma's Marathon, Public Arts Commission and Sister Cities Commission) look like permanent ones, but such things have a way of finding their way back in the city budget once the immediate pressure eases.
Local officials annually find easy excuses for why their budgets are in dire straits: St. Paul did it. What the Minnesota Legislature did, local officials say, was not give them the money they expected and "needed."
There's no reason to expect those annual disappointments to end anytime soon, so local governments must figure out what level of income they can realistically expect on a continuing basis and then limit spending to that amount.
Any employer with high personnel costs (such as local governments) will have to make some cuts there. Such trimming can't be made quickly because of multi-year union contracts that spell out personnel costs, but spending can be cut if the political will is present.
I doubt many city employees take home much more money in their paychecks than they deserve, so the best prospects for cuts will likely be in figuring out if there are unneeded employees on the city payroll -- which I also doubt that will be a fertile source of savings -- or in fringe benefits like early retirement, pensions and retiree health care benefits.
(Incidentally, everything I've said about the need to figure out a sustainable, long-term level of spending for city government also applies to the Duluth School District.)
Accomplishing this task will require looking at city spending on employees without assuming that past practices should continue. Any government jobs that have traditionally offered retirement before age 60 may have to be changed -- or at least have retirement benefits cut for those who opt out of public jobs early.
And in looking at the cost to the city of various fringe benefits, city officials shouldn't compare Duluth with other cities but with the private sector.
Most big companies have in recent years cross-trained workers to perform multiple tasks. The city (and school district) should do the same where they haven't already.
None of this will appeal to public employees or elected officials, but it may be the only answer to balancing future city income with expenditures.
My comments should not seem antagonistic to public employees. If some of the above steps are taken, the city and schools might later be able to avoid the kind of draconian cuts that are now being discussed.
Finally, on a (sort of) related city spending issue, councilors were wrong to vote 6-3 against limiting the amount of spending on city projects that goes for public art.
Councilor Sharla Gardner was one of the votes against a limit of $100,000 on any project. She has often contributed wisdom to council discussions during her first months on the council, but her comment on the public-art issue that "people don't want to just look at concrete walls" was wildly off point.
The DECC expansion, which now calls for spending nearly $400,000 for public art under the city's 1 percent formula, would hardly face bare walls under the $100,000 limit.
E-mail Virgil Swing at firstname.lastname@example.org .