Sunday, November 4, 2007
Woe are the local politicians
I saw an article in the paper today that discussed the affects of falling house values and the resulting lower tax revenues for local governments. For the first time in almost any one's memory, there is the possibility that taxes won't just keep going up and that local governments - Counties, Townships and Villages/Cities - might not get more this year than they did last year. Even mighty and wealthy Oakland County, Michigan has stated that the county revenues will be down next year, due to falling home prices and reduced revenues.
This is an unheard of thing and one that most of these government units have not planned for. All of these local governmental bodies are funded from the same well - property taxes. Government spending, on all levels, is based upon the premise that the well not only never runs dry, but that it flows more money into the coffers every year. That's why it's OK to make overly generous retirement benefits promises to current workers - there'll always be more tomorrow.
Now, with property values declining and the very real prospect that taxpayers will revolt if the local assessors keep raising the assessed values as if nothing has changed; local governments are faced with the need to deal with a new reality - the well may not have any more water to give. In my little corner of the world that recently translated into a road maintenance millage renewal being voted down. Of course, the initial reaction by the local politicians was to state that the taxpayers obviously didn't understand that they need the money; so, it will be put back on a future ballot and a better effort made to explain the tax increase. Perhaps the politicians don't understand that the tapped out taxpayers are just tired of seeing their taxes go up while their home values go down.
Perhaps the politicians need to figure out how to do a better job with what they have and spend less time trying to figure out how to get more. Now, local governmental entities aren't exactly hotbeds of corruption or waste; but, one has to believe that there are unexplored areas where cuts in spending can be made, better contracts negotiated, some projects or programs that can be cut back or promised benefits trimmed back. Local governments have always used the excuse that they had to offer better benefits, because they often paid less that the "prevailing wage" (a quaint leftover from the good times). Well, there are plenty of laid off workers wandering around now who wold welcome any wage; so, maybe they should look again at what they need to pay out in benefits.
So, I'll not cry for the local politicians. I suspect that they will find a way to keep giving themselves annual raises in pay and/or benefits even while they drive to work over pot-holed filled roads, past closed fire stations or police stations and empty parks and libraries. See my post of October 4th for the end game on this story.