Rob Douglas: Budgeting for the new normal

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Rob Douglas

Rob Douglas' column appears Fridays in the Steamboat Today. He can be reached at rdouglas@SteamboatToday.com.

Find more columns by Douglas here.

Like a scene from “The Wizard of Oz,” the economic stagnation hobbling America in the wake of the Great Recession has pulled back the curtain of market bubbles — housing being the most recent — to reveal an American economy that is a pyramid scheme devoid of the labor participation rate and overheated consumer spending that temporarily fueled economic growth while hiding the unimaginable cost of government.

Now that the curtain is withdrawn, Americans have realized that their previous assessment of what they could afford and what the government could afford were delusional. America is awakening to the reality that individually and collectively, we must transition from buying whatever we want to calculating how to pay for what we truly need.

Just as Americans are learning to live within their means, government must learn to prioritize spending in a manner that doesn’t further burden current citizens or future generations. The new normal for government spending should be to budget only for services that can be paid for within a generation at, or under, existing tax rates.

From unfunded military engagements and entitlements at the federal level to underfunded pension and welfare systems at the state level to an unquenchable thirst for local services and facilities, Americans must stop asking their elected officials to provide more until we meet our moral obligation to pay for what’s already on the balance sheet.

Even in Steamboat, a wealthy city that has weathered the economic storm better than most, prioritization of needs rather than wants must remain the order of the day.

This week, a draft of Steamboat’s new Stormwater Master Plan was made public. According to the city’s engineers and Interim City Manager Deb Hinsvark, the costs contained in the plan — coupled with anticipated expenses to meet new federal stormwater requirements, the cost of land purchases needed to implement improvements to the system and the cost of restoring and maintaining the city’s existing stormwater infrastructure — could be $40 million.

Commenting on those costs, Hinsvark told the Steamboat Today, “It’s kind of a big issue and a new issue that I can assure you we cannot address with the funding we currently have or get. We could spend every penny we have on it and still not address it.”

Of course, that statement comes from a government official who is one of the architects of the plan to spend upward of $10 million — almost the entire unrestricted reserve fund — on new police and fire stations that weren’t even priorities on the city’s capital improvement plan until former City Manager Jon Roberts offered to sell the downtown emergency services building at, arguably, a $900,000 discount.

Meanwhile, although city officials plan to create a task force to determine how to pay for the stormwater system upgrades, Hinsvark repeatedly has stated the costs should be paid as a monthly fee by Steamboat property owners. And it’s a fair bet the task force will agree with Hinsvark because they will be advised that’s what most cities do.

But that’s the old method of government budgeting — spend and raise taxes. It’s time for a new normal when it comes to government budgets. It’s time to recognize that we shouldn’t blow $10 million of reserve funds on new police and fire stations that aren’t a priority on the city’s capital improvement plan while potentially forcing property owners to cough up $40 million for stormwater infrastructure. Instead, the sale of the emergency services building and construction of new police and fire facilities should be shelved so the $10 million is available for stormwater infrastructure that truly needs immediate attention, backlogged maintenance for city facilities, raises for city workers and higher-priority items contained in the capital improvement plan. While $10 million won’t cover all those items, proper long-term budgeting will reduce or eliminate the need for higher fees and taxes.

Bottom line: If we can’t budget within our means in local communities like Steamboat, we have no chance of stopping overspending at the state and federal levels.

To reach Rob Douglas, email rdouglas@SteamboatToday.com.

Comments

jerry carlton 1 year, 11 months ago

Federal government= state government=County government=Steamboat city government. A house of cards with the joker calling the shots.

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Scott Wedel 1 year, 11 months ago

I actually read a chunk of the city's storm water plan. It identifies all of the deferred maintenance including culverts that are too small and that have been allowed to be partially blocked by silt and vegetation. Report notes that SB has had no maintenance plan for the culverts. So much of the expense is to simply make up for two decades of neglect. Nor does it all have to be replaced at once and can be prioritized.

There is also mention of acquiring property that have flooding issues (such as the places where sandbags were distributed a couple years ago). And Riverside is a bit of a mess with properties below the level of the street and some in the natural drainage path. Report does say that acquiring properties is expensive.

All of that is existing due to city mismanagement.

The report also mentions that EPA is planning on having new rules proposed by July 2013 and approved by Congress in 2014. The general expectation is that the new rules will change from current system of requiring having a plan and using good practices, and include measuring the quality of the storm water. Since the EPA standards have not been proposed and SB does not have storm water quality measurements then the ultimate cost of the regulations are pure speculation.

Since SB has paved roads, uses scoria instead of salt, and pretty frequent street cleaning (to control the scoria dust) then I think it is reasonable to think SB is in better shape than many places. I also doubt that this Congress is going to pass something extremely expensive for every city and town that has to be implemented immediately. So the ultimate costs are unknown.

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Fred Duckels 1 year, 11 months ago

This is an EPA reinforced by the "money is no object" environmentalists looking to send us back into the stone age. Recently the courts ruled that they cannot classify runoff as a pollutant, which would bankrupt the nation. This whole thing is a trial horse to see how far this thing can be carried. It's time for my nap.

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mark hartless 1 year, 11 months ago

I kind-of disagree with one of the principles in Rob's article.

Americans may be realizing that they can not PERSONALLY afford everything they thought they could.

However, I believe that a majority of them truly think that government actually CAN afford all the things that they can no longer provide for themselves.

Furthermore, I believe they are determined to extract their wish-list from government via the voting booth, where they have learned that it is possible to put people in power who will go out and put a gun to the heads of others and deliver to them what they can not legally attain for themselves.

I further believe that the awakening from this delusion, if it ever comes, will come far too late; indeed it is likely already too late to save for our posterity a nation with even a remote chance of retaining the standards of living we currently see slipping over the horizon.

This nation, and this City of Steamboat Springs, will not stop here on the precipise. The momentum is simply too strong; the delusion too real; the opportunity of the moment is, at least in their minds, plapable.

When given an opportunity to cast their burdens on their fellow Americans, on their childern, on their grandchildren, they simply can not help themselves. Their "self-esteem" pounds its heel on the podium of their minds as it screams: "I'm worth it!!!"

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