Thursday, September 30, 2004
Donny Ness takes on the city budget
Donny Ness, City Councilor At-Large, gave a presentation about the state of Duluth’s budget on Wednesday. Donny’s presentation was excellent. He was personable, persuasive, and, above all, he stuck to the issues at hand. Donny laid out the budget problems in an orderly fashion and then suggested that all Duluthians would have to sacrifice to solve these problems.
Specifically, Donny strongly suggested that we all experience diminishing city services, increased taxes, and a great deal of frustration. While Donny mentioned several causes for the shortfall, including decreasing aid from the State of Minnesota, flat sales taxes, and poor investment returns, he concentrated on the core issue: retiree health care. This issue, according to Donny, is the main damage driver in our current and future budgets.
Councilor Ness, without malice, recounted how we got ourselves into such a mess. In particular, he mentioned the “politics of the times” that allowed the last two administrations to let the issue slide. At the same time, Donny highlighted the difficulties that the current administration faces.
Regardless of the circumstances leading to our current predicament, one can be most certain that we are only now starting to face up to the problem. Given the serious look on Councilor Ness’s face throughout his presentation, I can only guess that cleaning up the whole mess is going to take a much longer time that it took to make it.
posted by Andy Peterson www.duluthchamber.com at
Tuesday, September 28, 2004
Councilor Gilbert's Resolution
Councilor Gilbert recently advanced, and then withdrew, a resolution to prevent any layoffs within city government. One can understand that the good councilor might be interested in the welfare of city employees. This is a good thing. However, one must wonder what Mr. Gilbert was thinking to bring forth such a resolution in the first place. Either Mr. Gilbert thought that such a resolution would protect the jobs of all city workers or that this resolution might spur some kind of real debate.
What is undebatable, however, is that we all have different viewpoints regarding the permanence of city employees. There are many good employees who want nothing more than to be empowered to do their jobs. Yet we must face reality and understand that we cannot continue to shrink our population, live with shrinking government budgets, and maintain the current city staffing levels.
This is an unfortunate situation for all of us who reside in Duluth.
The citizens of Duluth have several options: get more from fewer employees, live with fewer services, or find ways to increase the revenue pool (be a place where commerce thrives and reap the benefits). Perhaps Councilor Gilbert should have brought another resolution to the city council.
(Gilbert's resolution was withdrawn before the council could take action on it. The resolution is printed below)
04-0675R
REPLACEMENT
RESOLUTION FOR POLICY AGAINST LAYOFF OF EMPLOYEES.
BY COUNCILOR GILBERT:
WHEREAS, the present budget situation requires that the administration, city council and employees work as a team to deliver the best possible services at the lowest cost; and
WHEREAS, good management practices require that the administration and city council respect the talents, experience and opinions of employees to help balance the budget; and
WHEREAS, wages earned by city employees help strengthen the local economy; and
WHEREAS, city employees depend on their jobs to support families;
NOW, THEREFORE, BE IT RESOLVED, that the city council of the city of Duluth adopts a policy of “no layoff” of city employees commencing with the adoption of this resolution, such policy to be used in budget processing.
STATEMENT OF PURPOSE: This resolution establishes the policy that the council will not allow layoff of employees to be the method used to establish a balanced budget.
posted by Andy Peterson www.duluthchamber.com at
Monday, September 27, 2004
Rethinking the city budget
Yesterday, the Duluth News Tribune ran a story about Duluth’s Sister Cities. The paper questioned the city’s ability to sustain the Sister City program in light of a tight city budget. Good question, but far from the mark when it comes to our city budget.
Perhaps the city and the paper should take a lesson from one of many companies in our area that have had to adjust their budgets. St. Luke’s Hospital recently had to adjust its budget to make its year balance. SMDC, now known as the Benedictine System, has undergone a makeover in its staff compliment in order to better align itself for the future. There are numerous other examples. Reducing its commitment to the Sister Cities program might help the City’s budget situation. However, it is only a drop in the old proverbial city budget bucket.
Our city has rightfully inherited its budget mess. Politicians from years past have simply passed along the same old “different day” thinking to the next generation of elected officials who have done the same old thing. Einstein was correct: you cannot solve a problem with the same old thinking that got you there in the first place. To solve the problem we must think and act differently.
The Economist Magazine recently reported on the state of the world auto industry (see September 4, 2004: Ripe for Revolution). The American auto industry seems to be in a similar situation to the City of Duluth. However, the Economist points out that the American auto industry must change or risk being minimized in the face of world competition.
Perhaps we should take a lesson. Maybe it is time to look at a regional government, or at competitive bidding for public works within our city itself. Perhaps it is time to overhaul the retiree health care debacle.
Whatever the political debate brings at city hall, we can only be sure of one thing: change is inevitable.
posted by Andy Peterson www.duluthchamber.com at
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Wednesday, September 22, 2004
Email from a business owner to ISD 709 School Board - Great questions!
- The tax increase is not the means to fixing the problem. A business doesn’t have this ability and the district needs to operate as a business. It is time to truly review the expenses - current and upcoming - and make necessary adjustments.
My Questions:
What is the ratio of staff to students today compared to 1986?
Do we have too much staff?
Does the district own enough land to build a new high school to serve the Eastern ½ of Duluth?
If so, what is the value of the Central High School property?
Could this be used for private development?
Would this generate an on-going tax base for the district?
What impact do specialists have in the elementary?
When I was a kid, our teacher taught gym, music and art; why can't we do that again?
What can be saved by consolidating expenses, such as phone and internet, between the county, city and district?
Fixing the problem is desired - increasing taxes is a band-aid.
John (last name withheld by Chamber)
posted by Andy Peterson www.duluthchamber.com at
Tuesday, September 21, 2004
Duluth Budgeteer News Opinion City Tax - Reprinted With Permission
Whew, that was close. By only a 5-4 margin, the Duluth City Council maintained its fiscal sanity Monday. It agreed to up property taxes “only” 5.7 percent next year, which, when combined with the property tax freeze approved by St. Louis County, should keep the overall hike within Duluthians’ budgets. Egged on by Mayor Herb Bergson, councilors Greg Gilbert, Laurie Johnson, Donny Ness and Russ Stover decided that hiking the taxes on Duluth homes by 20 percent would create fewer problems than cutting government services. We beg to differ. A 20 percent increase in property taxes would increase demand for some government services, as it forced the poorest homeowners in the city onto the street or made them reduce their spending on food, medicine or clothing in order to stay in their homes. So much for the compassion of liberals. As the chart below provided by Hermantown Mayor Dave Allen reveals, the loss of state aid being suffered in Duluth is not nearly as severe proportionally as that suffered by some of our neighbors. A 3 percent cut in state aid does not necessitate a 20 percent hike in property taxes. It would have brought in more than twice the amount of the state aid cut. It is always difficult to make cuts in services, and the council has left itself in an unenviable position. It remains no less the right position.
posted by Andy Peterson www.duluthchamber.com at
City needs courage to solve budget shortfall
The City of Duluth needs courage to solve the current budget shortfall. Certainly, we've gotten into this problem by approaching the budget in the same ways we have always done it.
Unfortunately, the rules have changed - and so must we.
The State of Minnesota has reduced the amount of money it will give to the city, sales taxes are flat, and costs are up. The old rule states that we either raise taxes or cut services, period. We must re-examine that model. As private citizens, we are forced to make similar choices. When the cost of gas or health care increases, we do without or we find cheaper and more effective means to get the job done. So too, the city must find cheaper ways to get the same things done.
Cutting services or increasing taxes is easy - for awhile. For example, we fund our retirees' health care. This is honorable, indeed. But we do it in such a way that we do not take advantage of the benefits of Medicare, or other measures that might sharplky reduce our costs. Surely, if we ask the retirees to use Medicare as their primary source and then provide a supplemental plan to reimburse uncovered expenses, both the retirees and the taxpayers win. We must look at everything to see if we can find similar efficiencies.
Until we challenge ourselves to think and act differently, expect more of the same.
posted by Andy Peterson www.duluthchamber.com at
Friday, September 10, 2004
An actual email from a business owner to Mayor & City Council
Dear Mayor Bergson and Council members,
I am opposed to an increase in the city's property tax to cover the city's budget shortfall. Let's face it, we have to run the city's finances as we do our households. If at home we have a budget shortfall we can't go and confiscate it from the neighbors, we either have to get another job or cut the expenses. The same has to hold true for the city. Either come up with a revenue generating business or cut expenses. I know you will threaten the cuts will be made in police and fire, that is what we ALWAYS hear. Why not be honest and do cuts through a freeze on hiring, cut jobs that are duplicated in the city or county or other government organization. Try farming out some of the tasks if it would be less expensive. There are alot of creative ways of saving money. I would be willing to sit down and help brainstorm and work towards along term viable solution to the fiscal shortfall.
But raising taxes IS NOT the answer. You can get ahold of me at the office XXX - XXXX and I would be happy to visit with you about this.
(Chamber withheld name)
posted by Andy Peterson www.duluthchamber.com at
Thursday, September 09, 2004
Call to Action: City Budget
CALL TO ACTION: Make Your Voice Heard
City Budget Shortfall
Faced with a budget shortfall of $5 million for 2005 and millions more in coming years, Mayor Bergson recently suggested a 20% increase in the levy of the city's individual and commercial property taxes.
The Duluth Area Chamber of Commerce rose in powerful opposition to an extraordinarily large increase which does not provide a long-term solution to our city's long-term financial problem. The Chamber suggested instead at maximum an inflationary increase in combination with more innovative solutions that will effect long-term, positive change.
The Bergson administration remains resolute in support the substantial levy increase and affirmed that position before city councilors on Tuesday, September 7. The Duluth Area Chamber of Commerce believes the city can and must exhibit creative, responsible fiscal management without drastically increasing the financial burden on its individual and employer citizens.
Make Your Voice Heard
Mayor Bergson and our city councilors need to hear from you before they vote to raise the levy by 20%. They need to hear you describe how their decision will affect not only your home but your business. They will meet at 6:00pm Monday, September 13 in City Hall to discuss a maximum levy increase and will cast their vote during the 7:00pm council meeting.
At a minimum, contact our mayor and city councilors now to communicate you are concerned about the administration's lack of leadership in finding a long-term solution to our city's budget shortfall. Let them know a substantial levy increase will reduce your business's ability to prosper in Duluth.
Mayor Bergson can be reached at hbergson@ci.duluth.mn.us and 218.730.5230.
City Councilors can be universally emailed at council@ci.duluth.mn.us and 218.730.5740.
We urge you to attend the evening meeting on Monday, September 13 to communicate your concern in person to the administration and city council.
posted by Andy Peterson www.duluthchamber.com at
City needs new trees downtown
The City of Duluth needs to replant the trees that are downtown. Many of the current trees are either dead or dying. This simple act may serve as a way to show folks that our downtown is open for business.
posted by Andy Peterson www.duluthchamber.com at
City of Duluth Budget Shortfall
Duluth needs to fix its budget shortfall from a public policy perspective. In other words, if we do not structurally fix the budget we will end up having this politically charged discussion during every budget cycle. This will take real political will on the part of the elected officials in our city. Once this happens, expect things to change. If it does not happen, we can expect more of the same.
posted by Andy Peterson www.duluthchamber.com at
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