Last night, the City Council voted 5-0 to approve an increase in the property tax rate designed to keep the 2011 tax levy at the same level as 2010.
Much of the Council’s discussion related to the issue of personnel costs, which have been budgeted to increase 1.5% in 2011. Unfortunately, much of that discussion involved setting up strawmen (that critics were demanding drastic cuts in salary or personnel numbers) and knocking them down.
The city’s budget does nothing to address the long-term financial issues that this city faces. Even with the tax increase, 2012 and the rest of the five-year planning period still projects to have serious deficits that are going to have to be addressed either by further tax increase and/or spending cuts. Holding out hope that development is going to ride to the rescue in 2011 — which the Council seems to be counting on — is a pretty thin strand to grasp. While we all hope that the economy is poised to truly turn around, the stark reality is that the last two economic recoveries have taken far longer than historical post-WWII trend to produce a return to “normal”.
The Council seemingly hasn’t learned from recent experience with the Street Reconstruction Program or Water Rates. Kicking the can down the road doesn’t work. With those programs, the Council waited and waited, then was forced to make dramatic changes (a tax increase for the former and a near-doubling of rates for the latter). Thanks to the inaction of the Council to start addressing these structural issues with the 2011 budget, we’re potentially facing a much larger mess in 2012 and beyond.
When roughly 70% of the city general fund budget goes to personnel costs, you’re going to have to go there to get savings. Everyone appreciates that Chaska has, by and large, excellent city staff who are smart, versatile, and dedicated. But reality is reality. You can’t just wave away (as Mayor Mark Windschitl did) the fact that private sector workers have seen dismal labor market conditions and homeowners are experiencing declining property values. A one-year pay freeze for city employees would not be out of line given the current situation, and in fact, that would be far better than what many employees of other government agencies have been receiving.
It’s critical that Chaska’s financial house get put into order sooner rather than later. In January, the city will unveil the results of the Downtown Master Plan. First looks for some of the ideas on critical downtown blocks were given to the Chaska Herald last week. These ideas look promising, but they are not going to be free. If revitalization of downtown is as important as everyone says it is, then money is going to have to be freed up for these efforts. We’ve got to have the rest of the budget in line in order to be able to effectively address downtown (realizing that said funds will come from multiple sources). Otherwise, all the hard work (and the $83,000 in consulting fees) will go up on the shelf, not to be used.