The Austin Chronicle

Page Two

By Louis Black, August 22, 2003, Columns

Studying the Austin Music Network's finances could help us close not only the city General Fund's $50 million-plus deficit for fiscal 2004, but any state budget shortfalls as well. How many times has the AMN budget been discussed during the city budget crisis, as symptomatic of Austin's fiscal problems? Check the daily paper, talk radio, concerned citizens, and political candidates for the number of times it is cited. In the Chronicle's last round of City Council candidate interviews, it came up in almost every session, until I declared it off-limits. AMN seems to have come up with the financial equivalent of a perpetual motion machine. Consider this, without taking a position in favor of or against the channel: Eliminating AMN's funding, it is argued, would help reduce the city's General Fund shortfall. Right now, AMN represents 0% of the $461 million General Fund budget -- its funding comes from Austin Energy. Yet by eliminating 0%, we go a long way toward reducing an 11% shortfall. Certainly, by eliminating 0% of the state budget, we can begin to decrease that shortfall, as well.

Now, some might say that I'm being glib; the AMN budget is just an example of foolish city spending. OK, offer a better example. What about city land purchases that remove property from the tax base? Fifty years from now, the city's acquisition of water-quality conservation lands will seem prescient rather than foolish. (Imagine if city leaders in the mid-1970s had at that time used bond money to buy significant chunks of land in the Barton Creek Watershed.) But more importantly, those lands are being purchased with bonds, which will be repaid (with interest) out of city utility revenue, not from the General Fund.

"Obfuscation!" you charge. "This spending is more an example of the council's misplaced priorities and environmental obsession than anything else!" You may continue that City Hall is fiscally irresponsible, that Austin spent like trust-fund children during the boom, and that now we're facing the consequences. However, much of that which increased spending went to new public-safety services, parks and libraries, and other facilities and programs to take care of the sprawl created by growth and then annexation. Imagine how much bigger those budget line items would be if city leaders had done nothing to preserve the environment, regular development, and direct growth.

"Austin parks should be better-maintained, libraries opened more and better-stocked, police and fire beefed up, health and human services expanded and improved -- the problem has to be government fat, city staff, and mismanagement, doesn't it?"

Sorry, but the problem on the local, state, and national level is this: We, the taxpayers, don't want to pay for the level of government service we expect.

"What?! How outrageous! We're overtaxed as it is!" Which may be true, but those who argue for more police, EMS workers, and firefighters should realize that two-thirds of the General Fund already goes to public safety. Almost every knee-jerk cost-cutting measure offered, like AMN or land acquisition, affects spending that can be defended, or not, on its own terms, but which in any event does not actually come out of the General Fund. (In fact, many of the city's enterprise funds are facing financial challenges of their own.)

"Yeah, well, what about Smart Growth and tax abatements?" Outside of a few egregious excesses, Smart Growth, though discredited, still makes sense. A vital downtown is a necessary component of a healthy city. Many communities are much more concerned about the cost of failing downtowns than they are about the costs of incentives, which, for all the brouhaha, are relatively minor. Tax abatements are simply that: future taxes not levied, as an incentive to lure businesses to Austin or to a particular part of Austin. In the cases where the businesses have tanked, the city wouldn't now be getting that tax money anyway. This is not to say I support any and all tax abatements -- many strike me as foolish -- but if all were eliminated, the General Fund shortfall would not be closed.

Again: We, the taxpayers, don't want to pay for the level of government service we expect. We don't want to pay what is necessary for libraries, transportation, parks, health and human services, and public safety. Factor this out over every taxpayer; if you accept this argument, each of us, no matter how much we pay, is contributing a little less than we cost the city. During the city's Nineties growth explosion, regardless of the taxes they paid, each new citizen actually subtracted a little from the General Fund's balance. The shortfall is because servicing growth was more expensive than the revenue it brought in, and the regressive tax system doesn't generate the revenue necessary to adequately run the city. Now we may not be able to afford the quality of government we want, but it's time to retire the traditional anti-tax laments and deal with economic realities, not largely fictional excesses.

If you're reading this and sputtering, apoplectic in your disagreement, relax. Your view is winning. On a federal, state, and local level, we're going to see significant cuts in services and staff, with taxes either cut, kept the same, or increased minimally. Even if I'm dead wrong, these are just words on paper. The real world is undergoing a very different experiment, in exactly the opposite direction. If the less-government tax-cutters are right, after a period of adjustment, all things will improve.

The contrary view is that necessary services and supports are being truncated, if not eliminated, and the resulting job cuts will hurt the economy. Not only that, but in time national and state taxes will be raised, even more significantly than they might have been, as the circumstances created by the current economic policies and budget shortfalls have to be addressed and corrected.

"The solution to all these budgetary problems is simply to cut the fat, trim staff, and reduce salaries." One person's fat is often another person's muscle. The city budget under discussion here doesn't offer much fat. Killing the Austin Music Network is not, contrary to appearances, going to close the revenue-to-spending gap. If all the land acquisitions and tax abatements, regardless of real value to the city, were eliminated, this would have little impact on the overall city budget and even less on the General Fund.

"What about trimming salaries and eliminating management and city jobs across the board?" The willingness of folks to cut other folks' jobs and pay never ceases to amaze. One Statesman letter-writer suggested across-the-board city staff pay cuts. What about across-the-board city population pay cuts -- also known as tax increases?

The city provides necessary services. City workers are not simply endorsing paychecks but are usually overworked and overstressed in providing necessary services. Complaints about waiting in lines or delays in city services are not because of lazy workers, but because the city is understaffed and employees overworked. City workers often see co-worker positions cut while their duties are expanded without additional pay or benefits. Most city workers are committed and dedicated. The stereotyped do-nothing employee is as despised when working for the city as in the private sector. The salaries, even the high-end ones, are not inflated but are set at the level necessary to attract quality staff. Austin police are among the highest-paid in the state. We should be proud of that, not regretful.

The notion of so much easily trimmable fat is bogus. Redundant jobs or overloaded bureaucracies need to be cut, regulations streamlined, and services centralized when possible. There is fat, and it needs to be trimmed; there is unnecessary spending, and it needs to be cut. But superior public safety, health and human services, parks, transportation, libraries, and overall city services are expensive. These cuts won't balance the budget. No matter how valid complaints about tax burdens are, still: We are not willing to pay for the quality of government we demand and expect.

Nationally, statewide, and locally we are about to get the quality for which we are willing to pay. I'm betting there is going to be a howling about the failures or lacks in the public sector like we've rarely heard, with blame being heaped on every and all bodies, officials, programs, and offices except for the ones most responsible: the unwilling taxpayers. As much as I understand and appreciate the effects of the tax burden, I think the support, quality of life, and services provided in return are consistently discounted and dramatically underappreciated.

Without too much comment, the federal and state job cuts we're going to see over the next couple of years are going to negatively affect the quality of government services as well as have concentric economic impact. Some who are cheering the current state budget will find they may lose not only services, but their jobs as well, as this plays out.

The Bush administration's assault on the current tax system, meanwhile, is shifting the whole tax burden onto individual incomes. This means that when the deficit consequences and outcry over government inadequacies are finally addressed, not only will taxes be raised, but the working class (whether lower, middle, or upper) will be paying a much greater share. Those with invested, inherited, or inheriting wealth will find their contribution significantly diminished. If this talk is promoting class war, as the far right and talk-radio pundits would have it, then the meaning of that term has significantly changed.

Some think government is a largely unnecessary, superimposed, completely artificial structure that has grossly exaggerated its limited responsibilities in order to justify an ever-increasing fiscal appetite. If they're right, their new day is dawning. I think government is a way that all of us can interact and work together to create as healthy and functioning a society as possible with as much of the population considered and empowered as possible. This is done not for altruistic or knee-jerk liberal or goody-two-shoes reasons, but because it leads to the best possible world for us, for our children, for their children, and on into the future. If this view has any merit, we'll soon know as our nation, state, and city, both willingly in regard to tax cuts and legislation and unwillingly in response to budgetary shortfalls, radically move in the opposite direction. end story

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