Monday, July 16, 2012

Cities advised to address causes of their problems

It should be obvious that in order to fix a problem one  must identify what causes it.  Many of our governing officials whose cities are in financial trouble lack either the knowledge or the courage to admit that their problems are caused by too expensive retirement plans and other benefits they have promised.  I pointed that out on my blog in December 2010 under the heading of "Too  generous pensions to cause troubles ahead."

It is not as if these problems just arose and are a surprise.  About four decades ago long time Shreveport mayor Clyde Fant scolded the Louisiana legislature for promising benefits to city employees without providing a method of paying for those benefits.  Legislators had only one answer  -- levy more taxes. People are rebelling and cities are calling for their states to rescue them; states are begging the federal government for help, and the feds are calling on China for more loans.  

Some cities are buying a little time by laying off some workers.  It those employees are not needed they should not have been hired in the first place.  Eventually, the cities will have to renegotiate those benefits; why not do it now?

This reminds me of the time I was mayor of Homer and a member of the council revealed that he had promised a raise to a group of city employees (something he had no authority to do.) I responded that the budget had been adopted and there was no funds for raises. I asked him what he would  suggest be eliminated from the budget to free up money.  He came back with this, "Oh, there will be money here after we are all long gone."  I think many of our governing "leaders" understand the situation about that well.

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