Bill White's Fiscal Irresponsibility Leaves the Tab for Our Children

Since taking office, the budget shortfall has *doubled* from where Lee Brown estimated it to be. Bill White's fiscal irresponsibility is forcing our *children* to foot the bill. This man is mortgaging our future! I will not stand by and watch as this man *ruins* our economy and deprives people of employment! I'm sure all of this is an elaborate scheme to line the pockets of his big business cronies. Sickening. Sound familiar, LIBERALS? Boy, doesn't this make you all look silly.

Mayor: Budget deficit twice the prior figure
Layoffs, land sales among possible solutions
By KRISTEN MACK
Copyright 2004 Houston Chronicle
Mayor Bill White held out the prospect of employee layoffs Friday as he acknowledged that the projected budget gap for the coming fiscal year is twice as large as his predecessor's most dire forecast.

While Lee Brown's administration projected a $74 million shortfall for fiscal year 2005, which begins on July 1, White said he expects the gap to be more than $150 million because of several major -- and unavoidable -- expenses that are coming due.

In addition to considering layoffs, White said the city also might chip away at the huge deficit by selling some of its real estate.

He added, however, that there are some austerity measures he will not consider, including a property tax increase and pay cuts or furloughs for city employees.

"I've tried to get the most realistic idea of where we would be if it was more or less business as usual," White said, "and we've found that business as usual is unacceptable.

"The magnitude of the problem is greater than many people may appreciate," said the mayor, who took office five weeks ago Friday. "I'm confident we will solve the problem, but that will require getting at the root causes of some of these cost drivers."

Those "drivers" include a $40 million increase in the cost of employee health care benefits, a $50 million police pay raise that takes effect in April and a $60 million increase in the city's total contribution to the municipal, police and fire pension systems.

An analyst with the National League of Cities said Houston's predicament is pretty typical of cities nationwide.

"It's not just Houston. Those two (health care and pension system increases) are fairly prominent around the country," said Michael Pagano, the lead researcher for the NLC's annual report on cities' fiscal conditions and a professor of public administration at the University of Illinois at Chicago.

"We are now entering a phase in the economic cycle that is having an increasingly visible effect on cities, such as laying people off and cutting into the core of city services," Pagano said.

The last time cities experienced budgets this tight was in 1991 and, before that, the early 1980s, he said.

City Controller Annise Parker said that, while the economy and sales tax revenue seem to be inching up, she believes Houston is facing "a long, slow haul."

"We shouldn't expect any serendipity," Parker said. "It will be a difficult year to put forward a balanced budget and still provide the same level of services without new revenue streams."

The increase in the cost of employee health care benefits represents a 24 percent boost, to a total of $210 million, in the coming fiscal year. If the city absorbed all of that increase, White said, it would have an impact similar to a 10 percent cutback in department budgets or the layoffs of 200 city employees.

Instead, the administration will recommend next week that the city decrease its contribution from the current 88 percent to 80 percent.

A representative of the employees' union said this week that such a reduction would be unfair to city workers and would be the equivalent of a pay cut.

The police pay raise has been on the horizon for a while. White said he is not willing to renegotiate it because he believes police deserve to have their pay brought into line with that of other officers around the nation.

Pension benefits are the single biggest problem the city faces, having increased in recent years at a faster rate than the city's contributions. The municipal pension fund alone represents a nearly $1 billion unfunded liability, city financial officers say.

"We want to make sure the liability is well-funded and make sure that all the catching up does not have to occur in one year," White said. "I don't want to defer the day of reckoning.

"Instead of using an incremental approach of shifting a little money here or there, I'm going to the heart of the drivers of the city budget. Those will require some tough choices."

Among the money-saving options he is considering, White said solid-waste crews could pick up heavy trash on request, rather than going through neighborhoods looking for it.

Another possibility would be selling valuable city-owned real estate for a one-time cash infusion, he said.

White added that he will not consider pay cuts or furloughs, which would require employees to take days off without pay, because he views them as an inefficient way to manage.

However, laying off underskilled employees and reducing the number of supervisors or middle managers could be part of an overall plan.

"I'd consider laying off people, but not in a way that is clumsy or across the board," White said.

Metro also owes the city road construction money and repayment for costs related to the construction of light rail. The amounts are still under discussion, but Parker said Metro owes the city more than $50 million.

White said he does not want to compromise mass transit, however, and whatever amount Metro ultimately gives the city, it will be used for traffic-related projects.

This week, public works Director Jon Vanden Bosch said Houston's five-year capital improvement plan is no longer valid. White agreed Friday that the city may not be able to keep its capital expenditures -- on such big-ticket projects as major street improvements -- at previous levels.

"That's not unusual at all," Pagano said. "If you look back historically, the areas that tend to be reduced first are areas such as capital expenditures. The capital budget is the one I like to refer to as the flexible budget."

Cities can delay some road repairs for a year and still survive, Pagano said, but losing police officers on the street does not go over as well.

White said he is still optimistic that he can balance next year's budget, which he must propose by May 1, without cutting services.

Instead of making severe service cuts during Mayor Brown's recently ended six-year tenure, the city deferred spending through such steps as delaying the opening of a new library or cutting back on summertime pool hours.

"Next year will be an incredibly tight budget," said Parker, the city controller. "The pressures are going to be such that that should not be an option."

 

Congratulations! You have completely missed the entire point of this thread!

Note to self: Need to write on a much more simple level so that liberals can understand.