Our View: Budget needs more cutting

There is nothing easy about running a local government these days. Decisions that should have been made, or reversed, long ago are being forced now as property values keep declining and the economic future remains a general mystery. There is no more road to kick the can down.

But while hard, this has not been a bad thing for governments who had long grown too large and obese, offering larded employee benefits and pensions that were unaffordable and long out of step with the private sector. Reality is forcing changes that responsibility should have.

The town of Longboat Key continues to see falling revenues. It has more and more opportunities to trim, tighten and improve taxpayer bang for the buck, because it has no choice but to cut back and cut back more.

And by no choice, we mean that is the only good choice. Because any revenue enhancement should be a non-starter. (You’ve almost got to admire government attempts to obfuscate reality where tax hikes become revenue enhancements.)

The town is facing a 4.18% decline in property values, or about $371,000 less in revenue based on the current millage rate. This will be the fourth year of revenue reductions.

Town Manager Bruce St. Denis has included some cuts in the budget, but not enough to make up the entire shortfall. In fact, his proposed cuts only reduce expenditures by $164,000, leaving about $224,000 still to be made up using the current year’s budget as a baseline. His office could show more leadership in proposing cuts, because he is most intimately familiar with the town structure and costs.

Plus, by making cuts to far less than half of the shortfall, the proposed budget leaves the door open to increasing taxes or fees to make up the difference.

In fact, in a list of six items for the commission to consider in closing the gap, three include some form of generating more revenue — basically tax increases.

That option should not be on the table, because everyone, including Keynesians whose policy prescriptions have been so disastrous the past two years, agree that tax increases now are a bad idea.

Some might argue that because most of the Key’s tax base is residential, it does not hurt the economy to raise the millage rate slightly. After all, few businesses will be affected.

But that thinking is a basic misunderstanding of the principle that money in the private sectors is more efficiently allocated and therefore a bigger boost to the economy. By taking more money out of Longboaters’ wallets for government, you leave less for them to spend elsewhere in the economy. Bad policy.

However, St. Denis’ proposed cuts make sense, as far as they go.

• Eliminate the 401(k) private retirement match for police and fire pension plan members who already have pensions with a cost-of-living adjustment built in. (The town was actually providing both? Amazing.) This saves about $63,000.

• Eliminate a parks service worker position to save $42,000.
• Discontinue long-term disability insurance for employees to save $39,000.
• Reorganize the finance and purchasing departments to save $36,000.

But there are more cuts to be made — $224,000 worth. Tax increases or other revenue enhancements should be removed as a first order of business by the commission.

As we pointed out last week, there are commissioners with strong business backgrounds who can bring a new dynamic to the decision-making, one in which the town lives within its means without extracting more money from residents in any form — taxes, fees or other enhancements. This requires the commission to hold the town administration accountable to increase productivity, squeeze out more efficiencies and generally do the same with less.

It is necessary, and as is often said, that is the mother of invention.

+ Corrections
Vice Mayor David Brenner was a managing partner at Arthur Young & Co.

Longboat Key Commissioner Jack Duncan was as a longtime senior executive at Wilmington, Del.,-based Zeneca Pharmaceuticals (now Astra Zeneca Pharmaceuticals).

Their companies were incorrectly identified last week on this page.

To download a PDF of the Longboat Key town preliminary budget proposal, click here.