Financial Strains on Cities
http://thedianerehmshow.org/shows/2011-01-25/financial-strains-cities
Last week the city of Camden, New Jersey announces it a massive lay-offs including about half of its police force and a third of its firefighters. Budget woes were to blame, and Camden is not alone. With revenues and state aid falling cities across the country are facing some very tough choices - choices that will affect not just quality of life and education – but public safety as well. Join us as we talk to the mayors from several different cities about challenges they face, trade-offs to be made, and strategies ahead for regaining their city’s financial footing.
Guests
Chris Hoene
National League of Cities
Donald Kettl
Dean,School of Public Policy, University of Maryland
Dana Redd
Mayor, Camden , New Jersey
Don Plusquellic
Mayor, Akron, Ohio
Linda Thompson
Mayor, Harrisburg, PA
Jean Quan
Mayor, Oakland, California
Comments
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Please talk about the City Manager Form of government and the role this form of municipal governance may have played over the last thirty years or so of bloated city budgets. I know from experience of city managers who inflated their own incomes and that of their department heads and often answered direct questions from their council members with reassurances of their superior professional understanding of municipal decisions. Now many of these city managers are out of jobs, some with fairly hefty severance packages they creared for themselves and citizens and elected officials are left to manage the problems they left in their wake. How is the national organization of city managers beholden to or accountable for their role in these situations?
I live in South Florida. I was a small business owner until Feb. 2010 When my business I had had for six years had been held up at gun point and robbed. Two weeks later someone broke my window and stole my cash register. One week later a fight that broke my cafe tables out in front. I closed my business that month. Just Yesterday there was a funeral service for the two officers gunned down doing there job. The same day we hear about the two officers gunned down in St Petersberg. The same happened in Tampa back in July. How can we do this to our own cities? This is just the tip of a very large iceberg.
I have watched with interest the demonization of the evil civil service workers. We have neither caused the current problem or profited from it. I'd like to see the blame go where it belongs. For forty years I have kept up my side of the employment agreement only to see the employer try to get out of its side. Isn't the real problem the fact that governments did not fund these agreements the way they should have?
The fire department employees teach each other how to file for bogus disability pay right before they retire here in Oklahoma city, so they can collect two paychecks for their retirement.
Now they are worried about their retirement pay??
I don't feel sorry for these overpaid city employees at all.
Please keep in mind that in NJ the Pension Fund was running a surplus until governor Whitman and those governors that followed "cooked the books" by borrowing from the solvent pension fund in order to provide a government give away in the form of tax cuts for the very rich. Over the past 30 years trickle down economics has failed beyond the shadow of a doubt. Lets return to the tax rates we had during the post WWII Golden Age of Prosperity.
Excellent show and topic. I appreciate the representation of city leaders that are dealing with the shrinking tax base and difficulties in providing services. It would be interesting to highlight some cities that have weathered these times successfully and perhaps look to their management/organizational structures to see if other cities could follow the example.
Republicans made Obama take 40billion out of the stimulus package for cities and states and still voted against the package. This tea party thing about smaller govt is just the tip of what you're going to see in the future. They don't care about cities and the small guy including small businesses and have done everything they can do to kill any spending including beneficial spending. What if GM and Chrysler had not received the bail out or the banks? Where would we be now?? Republicans would rather see the country fail, than to see Obama be successful. It really a shame.
Diane:
This was an excellent show highlighting a problem that will surely grow in the coming years. Cities and counties throughout the U.S. will face increased pressure to make hard cuts on public services. Citizens will feel the pinch by decreased responsiveness from their local governments and increased taxes.
Creditors for these municipalities will feel the pinch, too. Once considered reliable and safe investments, municipal bond holders will likely face a surge in defaults in the coming years. The ensuing litigation will place even more pressure on the municipalities and may compel some to declare Chapter 9. This could have far-reaching harmful effects on municipal finance. The impact of this recession is far from over.
Brian
I tried to get my call In today, I surely hope people read what I have to say, this is so sadly true. I am from Toledo, Ohio and am the 3rd generation of heating contractors in my family. I recently had my heating contractors license revoked indefinitely, for the reason of...the OCILB licensing board in Columbus, Ohio has recently in the past few years have been slapping us contractors with outrageous annual registration late fees. We protested them this past dec. 2010, and informed OCILB that our home is in foreclosure, and have been without Health INS. for some time. They cashed our check for their annual fee and revoked our license INDEFINATLY, for not paying the late fee! We are now forced to shut down our business and start again in another state. The OCILB licensing board in Ohio was well aware of the issues affecting our nation, our States, our cities, and our neighborhoods, and yet would not hear nothing except pay the outrageous late fee, or we revoke your license, OUR RIGHT TO WORK. This alone Is a crime on the people who just got so ripped off with our IRA's, ect. If they continue to deprive us of jobs and our lively hoods, our cities will continue to
crumble.
Got new for you Herb:
GM and Chrysler can still go out of business if their is a down turn in the economy and I do not believe that the taxpayer is any bailout mood. By the way did you hear last week that GM is going to invest 540 million in Mexico for some state of the art plant (French Newspaper). The left will say yea "but GM is a global company and needs to have plants in other countries". Why not build them here, then export them. Remember Obama saying that he was so much against outsourcing.
The US government and labor unions still have an ownership in GM even with the recent public offering of stock. Gee, Michigan could sure use that investment in their state with 14% unemployment.
Joshua:
First of all I am sorry for your loss. I am sure not just the crime rate caused your business to close but over regulations put on you by an aggressive government system.
I hope that you will not give up on your future endeavors. Please see about protecting your property and purchase a gun. Police cannot be everywhere and one need to protect their property.
The compensation situation in California, which we all read about this past summer and fall is an anomaly. The majority of public employees-particularly city managers-are hardworking, honest individuals who are committed to enhancing the quality of life in their communities. It is simplistic to say that city manager compensation is to blame for many of the current woes discussed on yesterday's Diane Rehm Show, particularly since most of the jurisdictions described have never had a manager. The vast majority of cities and counties lead by managers over the years have cut back as a result of reduced revenues while continuing to successfully provide essential services (e.g., Phoenix, Arizona; San Antonio, Texas; and many jurisdictions in North Carolina). These cities have weathered the manufacturing decline of the late 90s early 2000s without implementing the kind of draconian measures required in Camden and Harrisburg. Those cities that have been struggling for years often without sound political leadership and management (particularly financial management) and the temporary measures they took to remain afloat have all been exhausted.
I'm sorry I missed the original airing of this show. I'm also a bit dissappointed that there were a large number of city repesentatives, but no employee representatives.
All too often today's media portrays public employees as overpaid with too many benefits. In university studies, just the opposite has been shown. Most public employees receive less compensation than the private sector, even when including their benefits. Most public pensions are capped between 70% and 90% of final average earnings, so retired public employees have lower wages and fewer benefits. The very few, although highly publicized, that receive more are simply an anomaly.
Public employees are all too often being blamed for cities' financial troubles, when in fact it is irresponsible actions by the cities, or cuts in revenue sharing by the states which creates the problem. Public employees have given back, are contributing to their pensions, contributing to and taking less health care. City officials look at cuts and see dollar savings, but do not see the jeapordy they put their citizens in by reducing public safety. It's time the citizens stand up to the cities and force them, our elected officials, to be responsible and protect our public safety, so that they may continue to protect us. We want a strong military to defend out country, why wouldn't we want a strong police and fire to protect us here at home?