Down The Sewer Pipe – Politically Speaking

In a few months governments all over the United States of America (USA) will begin their months long budget process. As an elected official you will be asked to pass a budget. If the budget does not line up with with your jurisdictions income, then you can expect that your local news media will point that out to everyone that they can. The media may also call your intelligence into question.

So just what is a budget? A budget is a spending plan if you get the money. What a budget is not is a green light for staff, or you, to go about spending every cent for the item(s) listed in the budget. Most people, and you should be one of these, understand that one cannot spend money that they do not have. Misunderstanding this is how many people get into finical trouble with credit cards. Credit is not money, it is a good faith loan made to you from a bank, based on your ability to pay the money you have borrowed back.

In government this credit is based on a credit standing with the bank the government uses. Some governments in the USA have very poor credit standing, because they have defaulted, or nearly defaulted, on a loan (usually made via the bond market). Government finance is not related to personal finance, and is removed from business finance.

In my experience people, elected to office, with a business background, will seek to make economy’s in operations. This may mean that if your government needs equipment the equipment will be the very cheapest money can buy. Or the choice to continue to do maintenance on equipment, where the amount of maintenance in the past 24 months could have bought your government new equipment.

In my experience, people with no government (or business) background will see raising taxes and fees as the only way forward. The reasoning is that the budget reflects the will of the people, and thus the people can afford the tax, or fee, raise. People that make these sort of decisions look at their pocket book. If they can afford a raise in a tax, or fee, they they believe everyone can.

What is missing is an equal part of the two ideas. This would look like:

1. Are there things in the budget that really need to be done in the next fiscal year. If not vacate, the budget request for that item and choose the next item. Note you aren’t “saving” money. You are just not spending the governments money on it. So the amount substracted doesn’t mean you have an amount to spend someplace else in the budget.
2. Can the government live on the income of the previous year? if it can no need to raise taxes, or fees. If it cannot then which taxes, or fees, need to be raised and by how much?
3. Does the budget reflect the best “bang for the buck”? That is are the things in the budget bought at the best possible price? Some things, like pre-punched printer paper can be bought cheaper if a whole year’s worth of paper is bought at the same time (the government office does need to have storage for it), rather than buying 5 reams of paper several times during the year.
4. Are the Request For Proposals (RFP’s) well written? If the RFP’s are poorly written then expect cost overruns for street paving, repairs to the sewer plant, replacement of equipment in the water plant, sewer line or potable water line construction to occur.
5. Is anyone, living in your community, adversely impacted by raising of taxes and fees. I have heard people elected to office say things like “it is just a cup of coffee”. So it is ok for a person elected to office to buy a cup of joe, but not the produce person at the local market? Keep in mind that parts of the budget you are working with provide zero benefit to people that live in your community. Using he budget to put side walks down town benefits, potentially, everyone in the community. But using the budget to provide sidewalks in a residential district of your town doesn’t benefit the person that lives a mile away.

Not everyone in your community make the same amount of money. Not everyone gets a 5% raise every year. Businesses cannot always raise prices to provide government with money, that in some respects is wasted because the contract for a sewer line was poorly written. It is your job, as a person elected to office, to ensure that people don’t have to make the choice between food and rent. keep in mind that the budget you finally pass will drive up, or down, the cost of living for the entire community that you serve.