On Thu, 14 Sep 2000, Bruce Gaarder wrote:
> Russell asks how a city budget can ignore inflation. Look to Saint Paul,
> where Normie has led the council to a seventh year without an increase in
> the dollar amount of the property tax levy. I disagree with this approach,
> but that's the way it is now.
As a Saint Paul employee, I can attest to this being a bad
idea. We were asked for a 1.25% across the board budget cut in order to
lessen a percieved shortfall estimated to hit in 2001. Then he went and
wants to give away a good chunk of our budget reserves (I was livid when I
found out about that). Next year we get to cut 1.75, if my sources are
correct.
If I remember the justifications going on a few years back in
regards to the State budget, the act of ignoring inflation is an
easy-to-swallow way to take an across-the-board 3% whack out of a
budget. I quite frequently heard the Minnapolis Public Schools doing
exactly that when I was involved (1991-93, recessionary years I
believe). The problem is more exacerbated when your revenue stream
doesn't scale with inflation.
> In one of the posts, it was said that adjusting for inflation doesn't hurt,
> but that's only true for those with incomes that rise with inflation. Many
> retired folks have pensions that don't change year to year.
Exactly! If you're a city who has decreasing property values,
then you're on a 'fixed income'. If your values are rising, then you can
reasonably add new services.... unless you've already spent that money
years aro.
Greg Riedesel
SSP
---
Only in America:
Because of a fear of lawsuits, companies spent megabucks to fix a bug.
The bug was squashed so well, they're being sued because nothing happened.
