Sunday, March 21, 2010

Spending Cuts

Forget Doing More With Less. Just Do Less

Governor Christie has doled out the tough medicine to municipalities and school boards. If raising property taxes was the answer, there would not be such an outcry. Municipal officials and school board members already know taxes are too high. As Governor Christie has said, the state enabled run away spending for too long and we all, municipal officials and voters alike, kept papering over the problem and avoiding the tough decisions. The time to pay the piper has come.

I'm not going to offer specifics here, but rather a suggested approach to spending reductions from municipal officials and school boards. In no way do I think I'm an expert or know better than those elected. I'm relatively well informed taxpayer and businessman who has made previously unthinkable cuts in order to survive. If there is something here that helps, good. If not, no harm done or intended.

1) Take charge.
Most municipal officials and school board members are part time employees who are poorly paid or volunteers. Most have been wise to rely on paid professionals to craft budgets and for guidance as to what is legal and acceptable and what is not. What is necessary and what is not. You need to take charge now. Test the professionals and push harder.

No matter how good and well intended your CFO, administrator or superintendent is, his or her interests are not the taxpayers interests. It is your job to look out for the taxpayers. Push back and demand more cuts. Talk to officials from other jurisdictions for ideas and knowledge.

2)Officials from larger towns should seek advice from officials from smaller towns. They have been managing with greatly reduced funding for years. There will be small towns with budgets that have tax reductions this year. It can be done and you can do it.

3) Take a tax increase off the table. Start your budget with what you spent last year, less the reduction in state funding, less another 5%. That's your revenue. Now make your expenses match it.

4)Surpluses are for a raining day. It's raining. Keep a reasonable surplus. Reasonable is less than your CFO says it is.

5) Reduce debt service by refinancing and for longer terms, especially if you chose conservative shorter terms when times were good.

7) Some sacred cows will have to be gored. With reduced personnel, somethings won't get done. Eventually no one will miss those things. Other things will take longer to get done. That is OK.

Think volunteers. We already use volunteers to serve on boards and commissions. Other tasks can be done by volunteers too.

8) Think with your head. Console with your heart. Don't take anger personally and don't respond to it in kind.

We're all rooting for you and don't envy your task.


ambrosiajr said...

The first of the tax increases is in...Manalapn-Englishtown School board voted to raise taxes...10 cents per hundred in Englistown. That's about a $250 increase...and this is just the beginning.

Anonymous said...

well, time to do less.. all levels.. "mama gov't."(us) be broke..