North Texas
(2009-06-18)
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Dallas, Fort Worth, and other big Texas cities are not alone in their battles against budget shortfalls. KERA's BJ Austin says local governments across the U.S. are making painful cuts.
A National League of Cities Survey earlier this year showed four out of five cities are less able to meet citizens' needs than they were a year go because of the economic squeeze. 92% of them predict it'll get worse. That's the most negative assessment of city fiscal conditions in the history of the National League of Cities survey dating back to 1985.
Mike Eastland, executive director of the North Central Texas Council of Governments feels their pain.
Eastland: Demand for services just continues to rise. The expense of delivering the services continues to rise. The aging infrastructure that needs maintenance is always a cause of concern. It's going to be a very, very difficult budget year this year, and probably even next year - and could longer into the next. Normally what cities see when tax rolls decline, it's several years before they actually begin to go back up again.
So, how did this happen? Dave Cook, Dallas Chief Financial Officer, says it's not the city's fault - it's the recession.
Cook: We're looking at reduced revenues from current year budget to next year's outlook, revenues are down 130 million dollars. That's the primary cause of our situation.
Cities in Texas depend on sales and property taxes as primary sources of revenue. In this economic downturn, people aren't spending as much, so sales tax collections are down. And property values have declined. That generally means a drop in the amount of property taxes to be paid.
Cities are coping by downsizing. Hiring freezes and layoffs are the most common responses, according to the National League of Cities. That's followed by cancellation of capital infrastructure projects, followed by cuts in services, such as libraries, parks and recreation centers.
Dr. Robert Bland, Chairman of the University of North Texas Public Administration Department, sees a new trend in budget cutting this recession: employee furloughs. Those are UNPAID days off. He says governments have not traditionally done that.
Bland: There's an element of equity when employees are furloughed because everyone presumably is bearing a pro rata share of the cost of the budget shortfall. Fewer people have to lose their job as a result of furloughs. So, that's the biggest surprise I have seen in this go-round. I haven't seen the use of furloughs in past recessions like they have been used this time around.
Dallas officials plan two employee furlough days this budget year; four next year. Dave Cook says closing City Hall and other non-emergency operations for a day saves 800 thousand dollars. Mike Eastland, Council of Governments, says this is a painful time for city leaders. He expects it will have a long lasting effect on budgets when the good times return. Eastland predicts cities will look at new programs and ask, do we really need them?
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