10step Program Can Avoid Rerun Of Countys Budget Circus
Written by Michael Lewis on September 24, 2009
By Michael Lewis
Can we learn from our mistakes? If so, government should learn a mountain from the 2010 Miami-Dade County budget fiasco.
One glaring fault was last-minute backroom dealings among commissioners and the manager during a rush through what should have been a long, deliberative process.
Those who came to the so-called public meeting will long remember that the key talks were held in private. Legal or not, it smells.
Then there’s the uncertainty.
Despite a final vote for $444 million in cuts to match lower revenues, as of today nobody knows what jobs will be cut, who got what trims restored to the budget, how that pie of restored cash will be divvied up, or whether commissioners will hold the line in upcoming union talks that could throw spending out of balance again.
Dragging the budget meeting to after 5 a.m. after hammering out final cuts for only two days may sound insane, but without a total revamp the chaos next year will be far worse.
County Property Appraiser Pedro Garcia has said all along that next year’s cuts will be even more painful.
That’s because appraisals on which taxes were based rest on Jan. 1, 2009, property values. But prices will have dropped further by Jan. 1, 2010. Lower values equate to either lower county tax income or higher tax rates.
Moreover, that whole process of cuts will start from today’s newly reduced base rather than last year’s fatter purse.
To exacerbate matters, there’s little construction this year to add to the tax roll buildings to fill gaps that falling assessments leave.
Matters could get worse still if Mr. Garcia wises up and does the fair thing: takes foreclosures into account when appraising property, which would mean far steeper drops in valuation, and hence in taxes.
This year, he pretended foreclosures didn’t exist. He ignored them when evaluating properties against sales of comparable holdings.
As we all know, however, foreclosures are real and growing. Ignoring them is like saying that shoppers will compare one store’s grocery prices only to prices on competitors’ shelves that aren’t reduced. Shoppers, however, do act on price discounts, and so do real estate buyers.
That means that slashing $444 million from the budget merely marks the baseline from which new cuts will come. Fat cut away this year won’t be available to trim again. So government will have to cut into fat nearer and dearer to commissioners and administrators, like high salaries in their own staffs.
The county should begin planning this very day for next year, either building support to raise taxes or finding even more painful ways to cut spending.
Obviously, in difficult days lower spending is the right call. After this year’s fiasco, even fewer of us will be backing tax hikes to keep the county from shrinking.
As commissioners prepare for that next crisis, rather than base plans on calls by group after group for funds, they must begin now to scale back expectations for government’s scope.
That could well lead to fewer duplicative layers in a system where the strong mayor and the manager have the same role, or fewer old friends on staff at high salaries, Mr. Mayor.
For government to learn from its mistakes, it should heed 10 key points:
1. Assess properties based on real values, including foreclosures.
2. Plan right now for what we can and should expect of government.
3. Prepare to live with less in a smaller bureaucracy.
4. Don’t leave decision-making to the unelected manager. The commission should start today to draft key changes it chooses, including that reduced government role. The manager aims to preserve bureaucracy; that shouldn’t be the commission’s goal.
5. Be honest with the people. The budget is not a game — it’s a gameplan.
6. Avoid a repeat of this year’s circus. Wrap up planning even before the property appraiser gets to a final tax figure. Final minor changes can accommodate deviations from estimates.
7. Do it all in public. There’s no excuse for backroom deals during the budget vote — and don’t pretend the meetings were just to get information.
8. Know what you’re voting on. The final budget still isn’t written. How could commissioners in good conscience have approved a blank check? (Although, of course, they also did that with a Marlins Stadium, with the manager never responding to repeated questions on bottom-line cost.)
9. If you’re going to cut, don’t sneak in huge raises for friends. A ton of big police and fire department raises plus staff hikes by Commission Chairman Dennis Moss and Mayor Carlos Alvarez are perfectly legal but smell perfectly awful.
10. Balance the budget. It’s far easier to add than cut, so that’s just what the commission did. Katy Sorenson rightly grew exasperated with fellow commissioners who wanted to add but not cut to make the budget balance.
Finally, remember that the public is not interested in preserving government. It is interested in the value it gets from government — if it can see value.
This year, all voters saw at budget time was sneaky raises and sneaking into private meetings. That’s a negative value.
So commissioners must plan now for next year’s negative change to the budget — certainly not a tax hike.