Sustainability Is Important
When the money runs out, bad things happen. Hard decisions have to be taken. This is the lesson city managers and elected officials are learning in many U-S cities today.
Citizen Ellie recently returned from a month-long sojourn in the southwest. Her travels took her to Arizona and California -- states which are virtually bankrupt -- like Florida and others in the sunbelt which based their local economies on construction.
"If we build it, the snowbirds will come" was the mantra. Build they did, and the snowbirds came -- lured not only by the prospect of sunshine during the cold winter months, but by attractive sub-prime mortgages which meant Joe Lunchpail, toiling on the line at General Motors, could not only afford his suburban Detroit home, but a little place in the sun which could become the permanent residence after retirement.
But the bottom fell out of the sub-prime mortgage business. General Motors went into Chapter 11 bankruptcy. Joe Lunchpail joined the ranks of the unemployed. He could barely keep up the mortgage payments on his suburban Detroit home let alone carry the place in the sun.
That's why cities such as Phoenix, Arizona are in such deep doo- doo. Too many foreclosures. Too few people paying property, sales and the myriad of other taxes which keep the city going.
What's to be done ? Drastic cutbacks, that's what.
The good citizens of Phoenix are contemplating the closure of five senior centres, six libraries, 15 recreation centres and two arts centres. Approximately 1,379 city employees, including police (353 sworn officers and 56 civilians) and firefighters (144 sworn and 31 civilians).
Public safety in Phoenix now finds itself on the chopping block because other city departments have been cut to the bone in previous years in order to close budget deficits. And the city's much-vaunted light rail system will not be spared. It's share of funding could be cut by more than $1 million, cancelling late-night weekend service and increasing wait times during some weekday hours.
Phoenix's 90 executives and middle managers have been leading by example. They've pledged to take five days of unpaid furloughs and forgo cost-of-living increases, bonuses and other extra payments totalling seven (7%) per cent over two years. (Citizen Ellie nearly had a heart attack when she read this gem in the Arizona Republic.)
If all these cuts are approved when the city's budget is set in March, it will help close Phoenix's $242 million deficit, balancing the general fund budget through fiscal year 2011. Unlike Ottawa, there's no talk of municipal tax increases here. Nor are they looking to the senior levels of government for help. The state of Arizona is in serious trouble -- to the extent that over half of the state parks will be closed come June of this year -- this in a state which depends greatly on tourist dollars as its revenue base.
Meanwhile, the same type of budget exercise is going on in the city of San Diego, where police horses are being put out to pasture as their contribution towards balancing the budget.
Could we find outselves in the same situation in Ottawa ? Think about this: Dr. No is now in charge at Treasury Board. Stockwell Day's record of managing Alberta's spending speaks for itself. The public service (Ottawa's major employer) won't be expanding during his watch. In fact, it probably will shrink through attrition as retiring baby boomers aren't be replaced, thus sparing Dr. No from nasty encounters with the PS unions, but his Alberta record also indicates he's not shy on this score either. There won't be new government programs as erasing the deficit takes priority. And there will be more pensioners living on fixed incomes in the city.
Think about this: Dalton "The Deciever" McGuinty's government has saddled Ontario with a record deficit. Cost-cutting will soon become necessary at the provincial level and that doesn't bode well for municipalities which have been counting on the province to "upload" more of the social services it "downloaded" on to the property tax base back in the recession of the early 1990s.
Think about this: Ottawa's high-tech sector is a shadow of its former self. As it declined, there hasn't been any movement towards enticing good-paying jobs to the city to replace those which have been lost. The service industry employs a lot of poeple but these are mostly minimum wage jobs -- not good news for the property tax base.
So where is all this expansion going to come from that our city councillors keep talking about -- to justify their pie-in-the-sky tax-sucking projects ? Thank goodness common sense seemed to prevail (for once) when it came to taking a decision on expanding the city's boundaries.
And is anyone at city hall listening to the Parliamentary Budget Office and its message about the greying of the population and its corresponding efffect on revenues ?
In the meantime, Ottawa ratepayers are paying through the nose -- a 3.9 property tax hike PLUS a 10 per cent increase in water and sewer charges, PLUS a new green bin charge, PLUS a hydro meter charge, PLUS an OC Transpo fare increase PLUS a smart water meter charge PLUS those wonderful market value assessment increases. Taxes under any other name are still taxes.
If we're stupid enough to re-elect this same bunch of tax- and- spenders , then we're in for trouble down the road. Maybe not trouble of the magnitude which has befallen many of the major cities south of the border, but trouble just the same. Our councillors would do well to get on their computers and read some U-S newspapers such as the Arizona Republic, the San Diego Times-Union and the Orlando Sentinel and educate themselves as to what can happen when the money runs out. Better yet, most of them should do us all a favor by announcing they're not seeking re-election in order to spend more time with their families.
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