Rob Douglas: ‘We have a choice as a society’
March 20, 2014
"Considering the appetite of the City and regional residents for amenities and services and the need to take care of what we have and to increase services caused by organic growth, the City's ability to meet the needs with the current revenue base will at some point prove insufficient."
— Steamboat Springs City Manager Deb Hinsvark, State of the City Annual Report, March 18, 2014
"We have a choice as a society to either scale back those programs (Social Security and major health care programs) relative to what is promised under current law, or to raise tax revenue above its historical average to pay for the expansion of those programs, or to cut back on all other spending even more sharply than we already are."
— Congressional Budget Office Director Douglas Elmendorf, The Atlantic's 2014 Economy Summit, March 18, 2014
On Tuesday, from their respective posts 2,000 miles apart, Steamboat Springs City Manager Deb Hinsvark and Congressional Budget Office Director Douglas Elmendorf addressed the problem of local and national societies that want more services and financial assistance from government than government can afford with current revenue streams.
While proclaiming that Steamboat Springs currently is in good fiscal health operationally, Hinsvark used her State of the City Annual Report to warn of a lack of funds for infrastructure maintenance and improvements.
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"Steamboat Springs is staking its infrastructure health on future development. The Capital Fund receives dedicated revenue from Construction Use Tax, Excise Tax on Construction, a portion of a YVEA Franchise fee that is committed to undergrounding utilities and a small, annual Conservation Trust Fund payment. The City has also relied heavily on grants. All of these taxes, fees and grant funds have a potential end of life — leaving the Capital Projects Fund very vulnerable. …
"The City has a significant list of 'parked' capital projects. When CDOT decides to improve the Elk River Road and Downhill Drive intersection, we will need funds to do our share, and those funds are not in the 6-year CIP (Capital Improvements Fund) at this time. Elk River Road needs improvements to enable bikers and pedestrians to navigate the road and its intersections — that's about a $1.3 million fix. The rodeo needs a $4.4 million facelift. More money is needed for snowmaking equipment, and if the hill slides again, as it did year before last, we could be looking at another $300K there.
“When the stormwater crew is in place, it will enhance the current CIP list with newly discovered projects. Core trail extensions are at least $3.5 million going south and probably another $2.5 million to the west. Yampa's pedestrian bridge at the ambulance barn needs some upgrades — if not replacement — given the number of individuals who cross it during certain events. There's a push for a second sheet of ice. Many city streets that have been annexed into the City limits are inadequate and need shouldering. There is a $15 million sidewalk plan that could complete sidewalks throughout town. Some bridges in town such as the Oak Street Soda Creek Bridge will have to be replaced in the near future. Will the City ever want to rehomologate Howelsen so that FIS events can take place there? And restrooms — it has been determined that we can place vault toilets in City parks. These, while being much less expensive than plumbed toilets, remain unfunded. For the next six years, the City's CIP budget does not accommodate these items."
Simultaneously, Elmendorf was sounding the alarm about national fiscal challenges.
"The fundamental fiscal challenges come from growth in spending for Social Security and the major health care programs. The government as a whole is not getting bigger relative to the size of the economy.
"All federal spending, apart from that for Social Security and the major health care programs, will be a smaller share of GDP (gross domestic product) by 2020 than at any point in at least 70 years. But Social Security and the major health care programs will be much more expensive relative to GDP than they've been on average in the past.
"That is coming from the aging of the population — there'll be a third more people receiving Social Security and Medicare benefits a decade from now than there are today. It's coming partly from rising costs of health care per person. … And third it's coming from an expansion of federal programs to subsidize health insurance for lower-income Americans."
Looking at the inevitable need to reduce spending, raise taxes or both, Elmendorf summed up the nation's future with words that also ring true for Steamboat.
"There are a lot of possible ways to proceed, but they tend to be unpleasant in one way or another, and we have not as a society decided how much of that sort of unpleasantness to inflict on whom."
To reach Rob Douglas, email rdouglas@SteamboatToday.com