My challenge to Ms. Heller was to instead of sniping at the tax side of the governmental finance equation, find real budget reductions which could lead to tax reductions. My comments to Ms. Heller's posts are as follows:
> Rather than spend, spend, spend, borrow, borrow, borrow, tax - I am > suggesting a transition to spend, tax, pay the bills. Minneapolis is > choking on debt service right now and interest rates will be going up soon. > Something must be done pronto. > Property taxes should be doubled - until all debts are paid - including the > new library, the new Guthrie, and whatever happens at the Sear's site. > > Once the debts are gone, Minneapolis will once again be the shining star of > the North with more than enough money to maintain and increase its assets. First off, the City is not "choking on debt". Bond rating agencies would have downgraded the City if that were true, which they have not. The City, in fact, when you take out the Convention Center debt which is self-supporting, has a pretty normal level of debt for a city of its size, especially when you look at property-tax supported debt. The City got into trouble in the mid-1970's in its property-tax supported debt levels and has maintained a very tight rein on debt issuance ever since. Possibly even too tight as there are questions about whether current debt levels are able to adequately maintain the current level of infrastructure. Second, there are really good reasons for issuing debt. One is that you have a large spike in spending, say when they put the water treatment plant upgrades and did not have a spare $80 million laying around. Second, say you are building a road. That road is going to be used for 20 years. Why should everyone in year one end up paying for the whole cost of the road and then everyone else after that use it for free? Bonds let you match up payment with the beneficiaries, so everyone using the road for the next 20 years pays for the road. Third, you could save up money to pay for things (called sinking funds) but again, that means that the people paying are not necessarily those benefiting. Third, there is a practical reason the City hasn't paid down all of its debt. You have to make double payments. You have to pay for anything new that comes along with cash as well as pay down the existing debt. As Vicki, who has been complaining about taxation levels notes, this would require raising taxes substantially. >We'll all be a lot smarter when the 2003 > reports are available. Why does it take so long for the City to produce > financial reports? The short answer is that accrual accounting takes longer than cash accounting to close the books for due to all the adjustments that need to be made. And the City is a billion dollar organization, so there is some complexity in the books. > The $97 million of "other" spending should be identified, since it is > equivalent to the entire police department. This is all laid out in the budget books and contains departments like the City Council, the Mayor, Finance, Human Resources, Assessor, Civil Rights, etc. > Until the debts and debt service are eliminated, the City should suspend > payments to "Other Independent Boards." Citizens should be willing to > contribute without expecting compensation. What are all of these boards > anyway? What do they do? Why can't the City Council make those decisions? The independent boards include the Park Board, the Library Board, the Municipal Building Commission (City Hall is technially owned half by the City and half by the County) and the Board of Estimate and Taxation. I think they now throw the Youth Coordinating Board too. Again, all of this is outlined in the Budget Books. Contributions to independent boards are not about paying people to serve on the boards. It is about paying the cost of the services provided by these boards, ie like the costs of running City Hall are part of the "Other Independent Boards" expenses. Again, all of this it outlined in the Budget Books. As to why the City Council can't make those decisions, the existence of things like the Park Board and Library Board have been hotly debated ever since their creation. I think the best arguement that I have heard is that there are certain kinds of services that citizens have singled out for special protection, services that contribute to the quality of life but services that would otherwise be perceived as less important and less deserving of funding if they were not singled out. Minneapolis has a wonderful park system and a wonderful library system and it is pretty easy to see that this wouldn't have happened if there hadn't been independent boards whose job was to protect and guide these services. > Without auditing each of the categories, it's difficult to identify wasteful > spending - and I don't have the time or desire to do it. My last comment would be this. Over the last ten years or so, the Legislature has been hacking and hacking at the City's budget. I can say with a lot of certainty, there isn't enough wasteful spending left in that budget to have any impact on taxes. At this point, if you want to argue that taxes would be lower, you really need to start picking what services should be cut. Fewer cops, fewer people fixing potholes, turning off streetlights, not rebuilding streets, not maintaining parks, laying off 25% of the library staff. It is down to the really hard decisions and I would challenge anyone who wants to cut taxes to pick the services they want cut. Carol Becker Longfellow REMINDERS: 1. Think a member has violated the rules? Email the list manager at [EMAIL PROTECTED] before continuing it on the list. 2. Don't feed the troll! Ignore obvious flame-bait. For state and national discussions see: http://e-democracy.org/discuss.html For external forums, see: http://e-democracy.org/mninteract ________________________________ Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[EMAIL PROTECTED] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls
