Financial Woes
November 10th, 2005 | by Craig |No matter how often the city pleads poverty, it seems they can always scrape up $60K here and there for feasability studies and things of that nature.
Which, by the way, always seem to be done by out-of-state consultants.
This, I think, is really part of a larger problem that is endemic to governments.
Let’s say that you are an elected official in a smallish Montana town. You’ve inherited a budget that’s a mess and you want to try to get it straightened out.
First thing you do, is you sit down with your budget documents for the whole town, and from each of your department heads.
Now, your department heads know that you’re going to be doing a little bit of trimming here and there, so they maybe throw in an extra 10% on their budget. That way, they can say, “Well, I suppose I can cut 8% out of there, but that’s about it.” The department head looks good, because he “trimmed” his budget to the tune of a 2% increase.
Let’s take the other side of the coin. Say you’ve got some department heads who know what the score is, and they come together and say, “OK, we can cut 10% out of our budget and do fine this year. We’ll be doing without some stuff, but we can get by.” That’s all well and good, but guess what happens when the budget comes out next year: the council says, “Well, you did just fine with this amount last year, and now you want us to give you more money?”
The incentives in the budget process are perverse as hell. There’s no incentive for anyone to cut their budget because they might not get it this year. This is also why you’ll see agencies blow tons of money on fancy stuff in the 11th month of their fiscal year. It’s in their budget, so they have to spend it, else they won’t get it next year.
The answer is to hope that you can get mostly honest people around the table and make trade-offs. A 10% budget cut this year might mean more towards a pet capital improvement project next year. The problem is that councils come and go, but department heads remain. If I’m a department head, I may not want to make a 10% concession that isn’t guaranteed to come back next year.
2 Responses to “Financial Woes”
By tajlund on Nov 10, 2005 | Reply
It’s amazing the worthless things that the city can drop money into. It makes you wonder how much we are going to have to pay for the city to fight the new mayor. We could hope that they would resolve things peacefully but I just don’t see it happening.
By GeeGuy on Nov 11, 2005 | Reply
Only marginally on point with your article, but on point with your introduction about feasibility studies is this: Doesn’t it p*ss you off that your city employs a full time city attorney (or two or three, or whatever), and yet when sued they go and hire outside counsel? Why have a city attorney? In fact, cities outsource so much, you wonder what the point of having staff might be!