Cities -- no stone unturned in battle against deficits
Louisville, Ky. — You can't spend what you don't have. That simple fact is forcing the majority of America's cities, where operating expenses now exceed income, to reach out imaginatively -- if also somewhat desperately -- in new directions.
By law, the nation's cities cannot afford the luxury of a deficit. And the options for budget balancing largely come down to service cuts, new or higher taxes, and finding new sources of tax revenue.
Monitor interviews with six mayor attending the US Conference of Mayors annual meeting here suggest that many cities are trying a little of everything. When one door is closed, as often happens, city officials may move twice as energetically in remaining directions.
In Muskegon, Mich., where unemployment in auto-related industries is high, voters have turned down a city income tax on four occasions in the last decade. About half of the city's $7.5 million annual budget goes for public safety. Accordingly, after deep cuts in the city employee staff, police and firefighting forces were cut in half.
"It's getting to the point of danger to police and fire officers themselves," says Mayor Marguerite Holcomb, "but we just know there isn't going to be any more money.
One way in which Muskegon and a number of other cities are trying to pare expenses is by combining services with nearby suburbs and towns. Mayor Holcomb says that she and the mayors and city managers of four neighboring towns now meet every month and are exploring the possibility of joint police, fire, computer, and printing services.
Several cities have been trying to save money and improve efficiency by hiring private firms to perform traditional public services.
Salt Lake City, for instance, is experimenting with garbage collection by a private service in one-quarter of the city's service area. The low bidder is doing the job with only one man on each side-loading truck, something unionized public employees had said was impossible. Salt Lake City Mayor Ted L. Wilson says that the added competition has prodded public-works employees to follow suit.
"Our garbage collection has been done by private companies for about two years," says Paul Thompson, mayor of Sandy City, Utah. "At first they were banging up a lot of garbage cans and missing areas. But it has been getting better."
Most cities are working hard to lure more tourists, conventions, and industries. They are also exploring a variety of new taxes.
Facing the crimp of California's Proposition 13, officials of Long Beach, Calif., have cut some services and have consolidated several departments, but decided on a user fee to keep other services -- even essential trash collection -- going.
But Mayor Eunice N. Sato explains there is some relief in sight for residents , who now must pay $50 every two months to have their trash collected. The city is joining with Los Angeles County to build a trash recycling facility and will sell the energy generated in an effort to lift the user fee.
Mayor Sato explains that the city has been able to continue its street sweeping service only because it collects enough from illegally parked cars to finance the job. Long Beach, like most other cities, she says, has had to make tough choices. Because crime remains such a serious problem, the city is hiring 40 more police officers even as it trims in other areas.
All mayors are well aware that new taxes can backfire by sparkling an exodus of those who would pay them. A new committee in Salt Lake City, Mayor Wilson notes, is exploring such options as taxes on rooms and commuters with just such consequences figured in.
In most cases, imposing new taxes or raisin existing taxes requires the permission of both state legislature and local voters. In an effort to bypass the first obstacle, but not the second, Kansas City, Mo., Mayor Richard Berkley says he is trying to get home rule for his city so that it will have "complete freedom" if local voters approve, to raise or lower taxes locally in varying combinations.
But Gary, Ind., Mayor Richard Hatcher, outgoing president of the US Conference of Mayors and a staunch Democrat, points out in an interview that the ability of Indiana cities to raise taxes has essentially been frozen by state laws since 1973.
"Cities almost have no taxing power left to them," he insists. "And where they do, it may only succ eed in driving people out. . . ."