Miraculous Budget Reprieve Is Wasteful Gamesmanship
Written by Michael Lewis on October 1, 2009
By Michael Lewis
"How did we get into this mess?" my wife fretted.
She wasn’t referring to household spending. She was reading headlines about the county.
You read them too, reports like "Huge Budget Gap Means Layoffs or Tax Hike;" "Key County Salaries Go Through Roof;" "Arts and Elderly Aid Face Cutbacks."
I reminded her that falling real estate prices have shrunk tax collections, which had been escalating by double digits to fuel growing county payrolls and massive projects.
"So," she asked logically, "why didn’t they save then for the future?"
Please note the key word: logically. Obviously, she isn’t watching the inner workings of the county, where logic plays no role.
In answer, refer to Point 5 of my 10-point plan to avoid county budget crises. If you missed it here last week, Point 5 is "Be honest with the public. The budget is not a game — it’s a gameplan."
Today, though, the budget is a game, and county staff is very good at playing it. Let me illustrate.
Thirty years ago, when I was drawing annual budgets for a now-defunct Miami daily newspaper, the publisher made very clear that he wanted one thing above all in our budget: a cushion.
He wanted to be sure I padded the budget so heavily that after Atlanta headquarters whacked the heck out of spending, which it did each year, enough would remain to not only run the paper but leave a soft cushion too.
My job, then, was to lard the budget with visible fat that was easy to cut, making heroes of Atlanta’s sharp-pencil financiers, and to also hide fat they wouldn’t find so the publisher could end the year under budget and be a hero himself — all without cutting anything he wanted to keep.
That budget gamesmanship goes on in Miami-Dade’s government offices, too, but with a vital difference.
At the newspaper, the game was relatively harmless because at year’s end the owners got back the surplus we never spent.
At County Hall, however, the surplus stays hidden and never goes back to the owners, who are the taxpayers. Taxpayers keep funding fat each year and never get it back. It’s just rolled into next year’s county revenues.
That hidden fat helps create miracles such as we witnessed last month when about 700 jobs and countless community programs were miraculously saved in a two-hour span with previously untold millions that County Manager George Burgess pulled out of a hat.
A true miracle, or slight of hand?
Now, suppose officials had honestly projected both revenues and spending. That would change the way the county operates and avert the so-called catastrophe that was resolved at 5 in the morning by a so-called budget miracle.
Not that falling revenue isn’t real. Property tax bills in total are down more than 9%.
But a 9% drop wouldn’t have become a catastrophe in waiting had budgeters projected honestly what would be coming in. Instead, hyped reports said we had plenty available as we were committing $3 billion for a baseball stadium and hiring 3,147 new county employees in the past 12 months.
Those 12 months, by the way, ended well after the July plan by Mayor Carlos Alvarez to lay off 1,900 employees because of a budget crunch.
Were officials oblivious to the problem the mayor trumpeted? Were new employees to become sacrificial lambs? Or did insiders know they’d find hidden money to markedly scale back layoff plans?
For at the very time revenues were being hyped, resources were in fact being hidden.
Mayor Alvarez’s $7 billion plus budget plan showed a $427 million shortfall after every drop of fat had been cut, requiring 1,900 layoffs, a 5% pay cut across the board, and devastation to commissioners’ favorite programs for the elderly, arts, disabled and others.
Oh, and a tax hike too.
When commissioners refused to bite on the mayor’s tax increase during a recession or add to it to protect pet programs listed for cuts, the administration then cited a $444 million shortfall, requiring $17 million more be slashed.
But miraculously, millions afterwards showed up from deep within the budget. There’s that big cushion: first obvious fat was cut, then less obvious fat came out on deadline.
But, guess what? This year’s budget game isn’t yet over. To cut 5% from salaries of the 87% of county workers who are union members requires negotiations. The commission is the final arbiter, but unions give them bundles of votes.
Thus, we can expect rollback on pay cuts. And, guess what, another miracle will find more funds to compensate. Insiders say the plans for that are already laid and the funds identified.
Like the newspaper publisher, the county manager knows how to squirrel away tens of millions, just in case.
But as a budget crunch approached this year and as a larger one already looms next year, the county still somehow funds massive projects based on bonds that must be repaid far into the future — long after the mayor’s mandatory term limit and the manager’s retirement after 30 years with about a million-dollar package.
After they’re gone, no more rabbits will remain in the magician’s budget hat and the chickens of the budget game will come home to roost.
Now, however, is the time to quit playing the budget game, with its endless supply of taxpayers’ future money for massive projects that cannot be funded today because the money isn’t there.
Commissioners have to stop relying on miracles of found money that mean they never need make hard decisions about what Miami-Dade can actually afford.
The miracle of forever double-digit increases in tax revenues has already been exposed as fraudulent.
The next miracle to go up in smoke and mirrors should be the budget game that makes tax money appear out of nowhere — and then vanish again in questionable spending.
We’ll know we have a real county budget the first time no "miracles" remain to rescue commissioners from really hard decisions about what this county can actually afford to do.
Like the household budget, Miami-Dade County must learn to live within its real means.