We've probably all heard of the Bush service cuts putting the squeeze on local governments. Now these problems are being brought home to individual residents, thanks to an interesting experiment in participatory democracy.
The City of Menlo Park, CA faces a budget shortfall of $2.9 million, about 10% of the annual budget. This is despite fee increases, budget cuts and general belt-tightening by the city in recent years. The city council has run out of clear options, so they've asked the people: A month ago they sent out a pamphlet explaining the budget and describing city services, along with a survey asking residents which programs we would cut or what revenues we would raise. You can take a look at the information and survey online here. (But please don't submit the survey unless you're in Menlo Park -- I'm not asking anyone to "freep" anything.)
Learning about the local budget gave some interesting insights into how the Bush economy harms local communities, and what we can do about it:
I should point out that Menlo Park's problems must be very mild compared to what other communities are facing. This is because Menlo Park is, to put it simply, rich. It's an affluent town in Silicon Valley, with a median house value of $778,500. So we have options that other communities don't.
There's a space for comments in the survey, and I've copied some of mine here. First, reading about the city services, in light of being asked which ones to cut, really underscored the progressive notion of the role of government. It reinforced the idea that government allows us to invest in our community's future:
The City of Menlo Park's services are, in almost all cases, investments in our future. If the City cuts funding to a program by reducing services, Menlo Park residents wil bear the costs in other ways. Fully funding the police department lets us avoid the high costs of increased crime. By paying for infrastructure maintenance we minimize traffic problems and prevent property damage. Programs that enrich children's lives will lead to more productive and responsible adult citizens in the next generation. Business development brings revenue sources into the city. In fact, among all of Menlo Park's programs, only senior services might not be considered investments for the future -- and these are moral obligations. Even aesthetic improvements are investments, since they help attract visitors and clientele for local businesses.
It is by this reasoning that I recommend an increased investment in storm water management. Given the recent unpredictability of weather patterns and taking a lesson from the horrible catastrophe in the Gulf Coast region, this seems an essential investment.
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So if we don't cut investments further, we'll need new revenue sources. This is because a 50% drop in sales tax revenue has been one of the biggest direct causes of the budget imbalance. But the problem is really more insidious:
A new revenue source is necessary because of systematic and unavoidable changes in the retail economy. Specifically, retail spending seems to be shifting away from the types of small business that operate in Menlo Park. Instead, it is being consolidated in large "big-box" chains such as Target, Home Depot, and Ikea, which generally don't (and in my opinion, shouldn't) exist here, as well as online vendors. The recent near-closure of Kepler's Books is a clear example. This shift may be the primary cause of the decreased sales tax revenue, as opposed to an overall economic downturn. It's regrettable that neighboring communities had to deliberately attract large stores to bolster their own tax bases, but there's nothing we can do about it. It means our sales tax dollars are going to other cities, and they're not coming back.
So this is real Bush economics at work. Local governments are squeezed, and the poorer ones are being driven right into the hands of the big corporations. It's like school boards turning to soft drink contracts to raise funds. Poor towns lose federal grants and have to fight to get a Wal-Mart. So Wal-Mart comes in and can advertise about how much good they're doing for the community. But they're really just sucking revenues from other communities and killing small business. It's a win-win for BushCo, but everyone else loses.
So what do we do to balance the budget? The sensible thing to do of course is to roll back the Bush tax cuts, but those who would do that lost the election. If the federal government, even in the wake of Katrina, won't be fiscally responsible, we have to do it ourselves, at the local level:
Over the last five years we have experienced significant revenue reductions due to tax contribution cuts at the federal and state level. With enormous federal deficits and state budget problems over the last few years, we can now see that these contribution cuts were fiscally irresponsible and ineffective at stimulating the economy. The fiscal problems have then been passed down the chain by reduced federal grants to states, and the State's use of local revenues. While Washington and Sacramento can get away with leveraging our future, Menlo Park cannot. We simply can't afford these contribution cuts. For most residents, the contribution required by a 3.5% UUT would not even come close to matching the recent state and federal contribution reductions. So we'd still be contributing no more toward public services than we were in the '90s.
This just shows how important it is to compete at all levels. Even as Bush and Norquist are drowning the federal government in the bathtub, we can at least give our local governments a lifejacket. At the same time, we can challenge that cornerstone of conservative belief that taxes and government programs are somehow immoral.