Press Releases and Newsletters
Highway study: Work takes too long and costs too much
Gathered officials call for more regional coordination.
Regional transportation officials gathered Monday to find new ways to deliver projects as budgets shrink and state government turns to decentralized planning.
The basis of the meeting was a five-month study of the Charlotte region’s five transportation planning groups and similar organizations elsewhere. Centralina Council of Governments and the N.C. Department of Transportation paid for the work.
Surveys, focus groups and interviews found widespread frustration that projects take too long to plan and build, often because of financial problems.The state’s equity formula for distributing money is “equally inequitable – nobody feels they have enough,” quipped Terry Gibson, the N.C. Department of Transportation’s state highway administrator.
Among options for the Charlotte region: merging some or all of the functions of the five planning groups, or forming a regional transportation authority.Regional planning suffers now, the study found. Policy-makers in the region rarely meet, it noted, with elected officials on a transportation coordinating group not gathering for the past 18 months.
Working collaboratively could help develop a regional rail system and tackle air pollution, study participants said. But many respondents feared that approach could further bog down projects of local, not regional, interest.Transportation groups elsewhere do regional planning more effectively than those around Charlotte and with less fear of killing local priorities, the study found. The survey questioned seven planning groups elsewhere, including Atlanta and Nashville.
Some regional bodies have struggled, including the Georgia Regional Transportation Authority in Atlanta, which has had transit-dollar problems.Tampa-St. Petersburg, Fla., and Nashville, however, created new, regional transportation agencies while maintaining local planning groups.”You don’t need a regional authority to tell you what to do about a local intersection,” said Scott Lane of the Louis Berger Group, the consulting firm that did the study.
By Bruce Henderson
[email protected]
Posted: Tuesday, Nov. 16, 2010
Cities sweat funding as Congress picks at ‘earmarks’ (USA TODAY)
WASHINGTON — Cities are bracing to lose millions of dollars in funding for transportation and community projects, from subway lines to youth centers, because of a renewed push in Congress to ban lawmaker-directed spending known as “earmarks.”
With the incoming Republican majority in the House of Representatives committed to ending the practice and the Senate facing a vote to ban earmarks today, local officials are scrambling to find ways to pay for projects in case the federal funding never arrives.
Spending bills in the House for the 2011 fiscal year include more than 3,000 earmarks worth $3 billion, according to the budget watchdog Taxpayers for Common Sense — from $2.5 million for a transportation center in Rochester, N.Y., to $250,000 for park upgrades in Gonzales, La.
It’s not clear whether Congress will approve any of those in the year-end session underway. And after several candidates successfully raised the spending as an issue in the midterm elections, some local leaders say they’re worried about the chances in 2011.
“We’re hopeful that they don’t close the door on us,” said Hilliard Hampton, mayor of Inkster, Mich., a city west of Detroit that is in line for $1 million to build a senior center that would provide health care.
Congressional pet projects have come under intense scrutiny in recent months from members of both parties, including Senate GOP leader Mitch McConnell and President Obama. House Republicans have extended an earmark ban, but the future of the practice is less clear in the Senate.
Lawmakers will debate the issue again today thanks to an earmark ban proposed by Sen. Tom Coburn, R-Okla. The measure, which Coburn hopes to amend to a food-safety bill, needs 67 votes to pass — a tall order. The vote on the bill was delayed from Monday. “Senate Democrats have to do something,” said Steve Ellis with Taxpayers for Common Sense. “They can’t simply plow ahead … or they’re going to run into a buzz saw.”
A handful of Democrats, such as Sen. Claire McCaskill, D-Mo., support the ban. Others, such as Senate Democratic leader Harry Reid, note the spending represents a tiny fraction of the budget and say the money would be spent by federal agencies even if lawmakers gave up the earmarks.
The debate has left local governments unsure about whether they will receive any money. In La Joya, Texas, city Administrator Mike Alaniz said leaders have been trying to build a youth center for nearly 20 years. “Nothing fancy,” he said. “A big activity room and some lockers.”To finish the project, the city is looking to Congress for $500,000.
Texas Democratic Rep. Henry Cuellar requested the spending and defended the project. “Earmarks have just become a political football,” he said. Cuellar said supporters of the center are looking for other sources for money.
Longtime earmark critic Rep. Jeff Flake, R-Ariz., said he doesn’t doubt some of the requests are worthwhile, but said they should be judged fairly against other projects: “They ought to compete like everybody else.”
By John Fritze
11/30/10
NC legislators want to increase age for adult crimes (Asheville Citizen Times)
ASHEVILLE — A capacity audience Wednesday urged the North Carolina General Assembly to raise the age at which children can be tried as adults in the state.
Youths who are 16 and 17 years old are currently charged as adults in the state. The law is different than all the states that surround North Carolina. In Virginia and Tennessee, the age at which a person is tried as an adult is 18. In South Carolina, the age is 17.
State Rep. Alice Bordsen, who chairs the Youth Accountability Planning Task Force, said she and other legislators want to introduce a bill in the next General Assembly that raises the age to 18. They held a listening session at the North Carolina Arboretum on Wednesday to hear from the public about the current law.
Bordsen said the present law is unfair to youths in the state.“People say that they know what they are doing is wrong (at 16 and 17),” Bordsen said. “The question is, what do you do with them to make them productive members of society?”
Once a crime is committed as an adult, it is permanently on someone’s record. A criminal record can make getting a job more difficult and always has stigma associated with it, Bordsen said. In North Carolina, 86 percent of the crimes committed by 16- and 17-year-olds are misdemeanors; 10 percent are low-level felonies; and 4 percent are violent crimes.
“We are talking about basically 96 percent of 16- and 17-year-old criminal activity,” Bordsen said. “It’s not murderers. It’s not rapists.” Greg Borom, Children First/Communities in Schools director of advocacy and community engagement, said young people are still developing at 16 and 17 and do not need to be put into the adult criminal justice system. He said the legislature should “decriminalize our youth” and work on improving the community.
“We do more harm than good by sending teens to the adult justice system,” Borom said.
Jim Pitts, a retired professor and the local representative for the National Alliance for Mental Illness, said serious mental illness can lead youths to drugs and criminal activity. The state should help these young people solve their problems and not put them into the adult criminal justice system.
“We are undermining the creativity of the American population,” Pitts said. “We are criminalizing it.”
BY JAMES SHEA • NOVEMBER 18, 2010
Fiscal Mission Isn’t Impossible (John Hood)
RALEIGH – The classic spy show Mission: Impossible was exciting, excellent – and misnamed.
At the beginning of each episode, the Jim Phelps character played by Peter Graves would receive a recording that laid out a seemingly impossible mission. After the tape famously self-destructed within five seconds, Phelps and his team would then show that the mission wasn’t impossible at all. Just really challenging.
Admittedly, the title Mission: Really Challenging would have lacked a certain pizzazz. But it’s not a bad label to attach to the task of closing North Carolina’s big budget deficit next year without raising the state’s already onerous tax rates.
Outgoing legislative leaders and their allies within media and lobbying circles would clearly prefer the term “impossible.” They want to convince the public, who went the polls this fall to cast a vote for fiscal conservatism, that North Carolina’s fiscal challenges can’t be met without raising taxes.
Their claim is false. And since it rests on the assumption that North Carolinians possess too much of their own income, it’s a pretty hard sell.
Here’s the situation at a glance. After two years of stumbling through fiscal problems with federal bailouts and temporary taxes, North Carolina’s state government has around $20.6 billion worth of spending vs. about $17.4 billion in expected state revenue. There’s some quibbling about the precise figures, but essentially the state has a projected deficit in 2011-12 of around 16 percent.
Closing it will be exceedingly difficult. It will require reductions in every agency and department, from education to health care to public safety. It will require the elimination of thousands of employee positions (though not all by layoffs). It will require setting firm priorities and standing up to powerful spending lobbies.
But impossible? Hardly. The gap between North Carolina’s projected budget and revenue is nearly the same as the gap between the current cost of North Carolina’s government and that of Tennessee, South Carolina, Kentucky, South Dakota, Montana, Arizona, and New Mexico. While these states certainly don’t possess perfectly managed governments, and many face fiscal problems of their own this year, it is contrary to reality to suggest that North Carolina can’t deliver core government services with a proportionally smaller budget.
How might Gov. Beverly Perdue and the incoming Republican legislature accomplish this challenging task? Here are the broad outlines of a feasible plan to close the deficit:
• Save around $1.7 billion in the state’s education budget by reducing non-teaching positions in public schools by about 30 percent, rolling back recent class-size reductions, and focusing state higher-education funding on undergraduate instruction while raising tuition and private fundraising.
• Save about $800 million in health and human services by reducing Medicaid services and eligibility, reforming other entitlement and public-assistance programs, and focusing day-care subsidies only on special preschool interventions for our poorest children.
• Save around $100 million across the state’s range of justice and public safety programs, including changes in inmate health care, regulations, and sentences for nonviolent offenders.
• Save approximately $300 million by major reductions in the rest of state government, including an end to business subsidies, increased user fees for non-core public services, reductions in the state workforce, and a state agency reorganization that eliminates redundancies and improves accountability to the public.
• Close the remaining gap by selling state-owned assets and reclaiming revenues due to the state but currently routed elsewhere, such as the tobacco settlement money going to nonprofits and overhead receipts from research grants won through the use of taxpayer-funded university labs and facilities.
These fiscal measures will be difficult and painful, to be sure. But they simply reflect the application to government of the economic realities that North Carolina households and business have been grappling with for years now. If past governors and legislatures had listened to fiscal conservatives in the past, when we argued that 7 percent to 10 percent annual spending hikes were unsustainable and irresponsible, the state wouldn’t face such a yawning deficit.
But they didn’t, so now the mission is to clean up their mess. It’s challenging, not impossible.
———————–
Hood is president of the John Locke Foundation and publisher of CarolinaJournal.com.
By John Hood
November 19, 2010
GOP says too late to redistrict now (ENC.com)
A new Public Policy Polling survey shows considerable support for having an independent redistricting commission to redraw North Carolina’s political maps next year. A plurality even would support calling a special legislative session to set up such a commission.
However, Republican legislative leaders who had supported setting up an independent redistricting commission to redraw political maps following the 2010 census say it’s too late to set up such a procedure now. That means that the new congressional and legislative maps will most likely be done next year by the General Assembly.
Rep. Paul “Skip” Stam, R-Wake, who was just selected by his GOP peers as the next majority leader in the House, said there is not enough time to set up a constitutionally mandated commission to redraw the maps.
“I’m not interested in a statutory one; I never was,” Stam said. “It can get overridden the next day.”
Most agree that setting up a binding independent commission, which would require an amendment to the N.C. Constitution, is not likely because of time constraints. The General Assembly will not go back into session until Jan. 26. Constitutional amendments must first gain a three-fifths majority from both chambers in the General Assembly and then be ratified by a vote of the people.
The next time North Carolina voters are scheduled to go to the polls statewide is during the May 2012 primaries, well after the time that the maps need to be approved. Calling a special election earlier so that such a referendum could be placed on the ballot would cost millions of state and local tax dollars at a time when governments are facing tough financial times.
“We’ve got six months,” said Rep. Thom Tillis, R-Mecklenburg, who will likely be the next House speaker. He was referring to the time between convening in January and mid-summer 2011 when the leaders hope to have the redistricting maps complete so they can be submitted to the U.S. Department of Justice for Voting Rights Act approval.
“We want to be out of there by the end of June,” Tillis said.Senate Minority Leader Phil Berger, R-Rockingham, who will likely be the top officer in the state Senate next year, also agreed that time constraints would likely prevent setting up such a commission.
“Clearly, we don’t have time for a constitutional amendment,” Berger said. He said he didn’t expect lawmakers to set up a commission by statute either. He added that a redistricting lawsuit filed by Republicans in 2001, known as the Stephenson decision, placed stricter guidelines that would limit aggressive gerrymandering attempts.
In the PPP poll, 49 percent of the respondents said they would prefer seeing an independent redistricting commission draw the lines next year while 21 percent preferred members of the General Assembly draw them. The remaining 30 percent said they weren’t sure.
Forty percent said they preferred calling a special session between now and the end of the year to set up such a commission while 27 percent said they opposed the idea.
Sen. Ellie Kinnaird, D-Orange, who has joined Republicans in sponsoring a proposed amendment to the N.C. Constitution setting up an independent redistricting commission, said she is considering doing so again.
She said that often the party in power decides having such a commission is not the best idea. She acknowledged that Stam’s concern that a statutory commission’s work could easily be overridden by the General Assembly was something to consider.
While census data, including the apportionment of congressional seats among the 50 states, will be released by the end of the year, some states may not get their redistricting data from the Census Bureau until next spring. Tim Storey of the National Conference of State Legislatures told a recent gathering of state political reporters called Capitolbeat in Phoenix that the data will be rolled out by April 1.
Storey said that states would likely need to allow for about 120 to 180 days for Justice Department approval under the Voting Rights Act.
BARRY SMITH
November 23, 2010 8:06 AM
GOP takeover could complicate film incentives, annexation items (Wilmington Star News)
About two months away from the next state legislative session, lobbying has begun.
Last week, Wilmington City Council endorsed an aggressive wish list for the 2011 General Assembly which includes protecting the city’s annexation powers, enhancing the state’s film industry incentives and funding the Cape Fear Skyway project.
All three topics are expected to receive attention when the next General Assembly session begins Jan. 26.The city council also wants the state to give it the authority to prohibit car registration renewals for owners who don’t pay parking or red-light-camera fines. And it requests the ability to charge additional fees to businesses that serve alcohol to offset the costs of policing nearby areas, among other requests.
The city council unanimously signed off on the state legislative agenda at its meeting last week. State legislators will decide what legislation to pursue and what to put on the back burner when they go back to work in late January.
Annexation
This summer, the city council approved a bold plan to annex small areas in New Hanover County every couple of years for the next couple of decades. To pursue the plan, the council is asking legislators to protect its existing annexation powers, which have helped increase the city’s population – and tax base – significantly during the past 15 years.
But involuntary annexation opponents across the state are optimistic that 2011 might be the year for changes to the state’s longstanding annexation laws, especially because Republicans took control of both the House and Senate.
Cathy Heath, director and chairwoman of the nonprofit StopNCAnnexation, said GOP candidates from the mountains to the coast campaigned against forced annexation in the recent election. She said the outgoing Senate Democratic leaders were among the group’s biggest obstacles to reforming annexation laws in the past.
While she said a repeal of annexation statutes is unlikely, some changes that help residents targeted for annexation are possible.
“We’re going to be busy, and we’re going to work very hard to make sure something significant is actually done this year,” Heath said.With Republicans in charge, she said, “The landscape has definitely changed for the better.”
In the last legislative session, lawmakers considered changes to annexation laws – including one proposal that would require a vote of residents to be annexed – but no changes were approved by both chambers.
Heath also said Wilmington-area residents – because of the city’s annexation plans – could play a key role in the process.
“The people from that area, if they continue to speak up and continue to make themselves heard to the legislature, yes, they will be part of the legislation,” she said.
In contrast with the city, the New Hanover County Commissioners plan to ask legislators to change annexation policies in favor of property owners in proposed annexation areas, Chairman Jason Thompson said. “Anything that’s different from what we have now,” said Thompson, who opposes involuntary annexation.
Cape Fear Skyway
The city council also wants the General Assembly to provide the Skyway “gap” funding – the difference between the cost of constructing and operating the proposed highway and the amount of money generated by tolls. Currently, the funding gap is estimated at about $49 million a year for 40 years, a tall order considering the state’s present financial condition. The $1 billion-plus Skyway would connect New Hanover and Brunswick counties with a toll road and high-rise bridge across the Cape Fear River south of the Port of Wilmington.
Last year, gap funding bills were introduced in the House and Senate, but neither made it far.
State Rep. Danny McComas, R-New Hanover, said he expects the Skyway to be a topic of discussion among lawmakers in 2011. But, he said, while a new bridge is needed, the hefty cost of the current proposal might necessitate changes to the plan.
“I do think there’s room for improvement,” McComas said. “I’d like to see the cost go down, and I’d like to see a whole region that’s happy with what’s being proposed.”
Leland town officials have vowed to fight the current Skyway proposal, and Mayor Walter Futch has said the town planned to “put a stake through this project’s heart.”
The Skyway’s proposed route goes through Leland.
Film incentives
Last year, the General Assembly sweetened the pot for film production companies that do business in North Carolina.McComas, who has fought for improved film industry perks, said conversations have already begun about what further incentives should be pursued in the 2011-12 session. One possibility is raising the cap on the amount of a highly-paid actor’s salary that is eligible for tax credits from the state. Currently, the cap on a high-priced actor’s salary eligible for credits is $1 million.
Raising the cap was considered but ultimately dropped during the last legislative session
Bill Vassar, executive vice president of EUE Screen Gems Studios, said the state’s existing incentives are great for television series and lower-budget films. But raising the cap on the amount of an actor’s salary eligible for incentives could increase the state’s chances of landing the bigger films, he said.
“The present incentive is very attractive for television because no one makes over $1 million,” Vassar said.
Increasing the cap to $10 million would be ideal, he added. Larger films would employ more North Carolinians in “highly skilled, well-paying, blue-collar jobs,” he said.
It’s unclear what position the new GOP-controlled legislature will take on film incentives. Last year, during extensive floor debates on the topic, many Republican lawmakers spoke against the new film incentives package, particularly provisions related to high-paid actors.
But the film industry has an advocate in McComas, whose influence is expected to increase with Republicans in the majority.
Patrick Gannon: (919) 836-0889
By Patrick Gannon
[email protected]
Published: Monday, November 22, 2010 at 3:57 p.m.
Wake County Mayors Association Legislative Agenda (From Cary Mayor Weinbrecht’s blog)
Monday night I (Cary Mayor Weinbrecht) attended the Mayors Association meeting. This meeting marked the completion of my term as President. The President set the agenda and guests for the meetings. One accomplishment I am proud of in my term was the first meeting of the Wake County School Board and the Wake County Mayors. I hope there will be more of these meetings in the future. I am also proud of the fact that mayors are now presenting legislative agendas.
The new President will be Mayor Killen of Knightdale. Mayor Killen is a great guy and I am sure he will do a great job. Other meeting business included setting our Legislative Agenda for the 2011 session. The items we unanimously agreed upon were:
1.Protect our local government revenue stream including sales tax.
2.We do not support takeover of road maintenance from the state.
3.Lift cap on Charter Schools.
4.Do not increase any tax rates.
5.Eliminate the quasi-judicial process but all municipalities to maintain the ability to attach conditions of special use permits
6.Give all Wake municipalities the same authority to collect impact fees. We are all growing municipalities and face many of the same growing issues.
7.Support Dix as a state park but give financial support for a mental facility in Wake County. Allow some of Dix property to be used for mental health.
8.Allow Wake municipalities to join Raleigh, Chapel Hill, Carrboro, Asheville and Winston-Salem to enter into leases for the siting and operation of a renewable energy facility for 20 years instead of 10 years.
9.Allow farmland to be taken into municipalities to not have permitting requirements for changes (contact Mayor Killen for details).
10.Allow liens to be placed on properties if stormwater fees are not paid. (contact Mayor Matheny for details)
11.Give all Wake municipalities the authority for enterprise fees. See chapter 608 house bill 840, Session Law 2005-441 House Bill 1029. (Contact Mayor Matheny for details).
11/21/10
GOP says now’s not the time for tax reform in NC (Associated Press)
Tax reform is headed to the back burner again in North Carolina, despite new management at the General Assembly.
Corporate chiefs, social advocates and politicians on both sides of the political aisle have argued for a generation the state’s tax system is outdated because it reflects a manufacturing economy of textiles, tobacco and furniture. They’ve pleaded with the Legislature and governors to retool the tax code, tax more services like automobile repairs or legal work and reduce tax rates that are among the highest in the Southeast.
“This is an issue that has been up and down the flag pole,” said retired Wachovia Corp. chief executive John Medlin, a reform proponent and a Republican. “It’s something which needs to be done, but it never is quite the right time to do.”
It appears 2011 won’t be the right time, either.
Democrats fell short with a reform package in 2009 that Republicans called a tax increase in disguise. Now the GOP is in control of both chambers of the Legislature for the first time in more than a century, starting in January. Their leaders don’t dismiss the reform concept, but won’t tackle the politically sensitive issue for now.
Their top priorities are cutting unnecessary state spending and getting the economy back on track. While they’ve vowed to let a pair of temporary tax increases expire and want to reduce some tax rates, they’re don’t want to touch broader issues of balancing the tax code until the economy roars again and other campaign platform items are addressed.
“I’m not sure reforming the tax system is something that is appropriate at this time, simply because of the unsettled state of the economy,” said Sen. Phil Berger, R-Rockingham, who is expected to be elected Senate president pro tempore in January. “The people of North Carolina elected us, I believe, to get the state’s fiscal house in order.”
Since 2000, tax reform has been discussed by at least two legislative committees, an executive branch task force and even a special statewide conference. Tax experts have shown lawmakers graphs and tables showing the state is getting an ever decreasing percentage of its revenues from corporate income taxes and sales taxes because of exemptions, credits and a narrower base to tax.
It’s meant ever larger swings in revenues from recession to boom, leaving budget-writers with year-to-year uncertainty about what to expect to pay for permanent state expenses.
At a 2006 commission meeting, economists argued inaction would lead to legislators moving tax rates even higher and raiding trust funds.
That’s exactly what happened in 2009, during North Carolina’s worst year-to-year revenue decline since at least 1970.
Democratic Gov. Beverly Perdue took hundreds of millions of dollars from pots of money throughout state government to narrow a $3.2 billion shortfall. She and the Democratic-led Legislature also agreed to temporary sales and income tax increases to help close another budget gap.
Proponents of an overhaul want to lower the sales tax rate, currently 7.75 or 8 percent in most counties, the 6.9 percent corporate income tax rate, and the 7.75 percent income tax rate for the highest wage earners.
To make up lost revenue, lawmakers would close what’s labeled by some as corporate tax loopholes, adjust what is considered taxable individual income, and subject more services to the sales tax to tap into more long-term revenues. They could expand the sales tax, for example, to cover haircuts and building repairs, since it already captures retail sales for scissors, electric razors and building supplies.
“Tax reform is not the solution to this year’s budget gap. Tax reform will help avoid this kind of problem in the years to come,” said Roland Stephen, an assistant director at the Institute for Emerging Issues at North Carolina State University, which has worked since 2005 to try to build support for the reform. “It makes our system fairer.”
Senate Democrats rolled out a tax reform plan in 2009 that worried industries that would have to pay more taxes. House Democrats and Gov. Beverly Perdue also weren’t comfortable with the package and suggested waiting another year or two until the economy improved. Perdue, who would be asked to sign any reform plan, hasn’t staked out a strong position on pushing the idea in 2011.
Lawmakers held more meetings on the tax system over the next several months, and more people are now comfortable with the reform idea, said Rep. Paul Luebke, D-Durham, senior co-chairman of the House Finance Committee for the past two years.
“The tax modernization needs to happen whether Republicans or Democrats are in charge,” Luebke said.
A tight fiscal picture means very little room for error, according to some Republicans. Incoming House Majority Leader Paul Stam, R-Wake, said tax reform isn’t good to tackle right now because voters wouldn’t believe their plan is revenue neutral — meaning tax collections wouldn’t be higher overall compared to the year before.
“It’d be very difficult while we’re in a recession to do it right,” Stam said.
Scott Huffmon, a political science professor at Winthrop University in South Carolina, remembers hearing Democratic Gov. Jim Hunt talk about tax reform in the mid-1980s while growing up in North Carolina. In 2011 and beyond, Huffmon said, the influence of the tea party movement will make it difficult for Republicans to tackle the issue.
“Comprehensive tax reform will be very, very difficult to achieve, especially when many people came in (elected) saying, `we’ve been taxed enough all ready,'” he said.
By GARY D. ROBERTSON
RALEIGH, N.C.
11/26/2010
Mayors measure effect of belt-tightening on quality of life (USA TODAY)
The city of Hickory, N.C., where the unemployment rate soared from 2% to 16% during the recession, is repaving fewer streets, slashing dozens of city jobs, reducing library hours and closing two community pools. City workers haven’t gotten raises in two years, and the city has postponed development of some parks.
“We’re saying no to services we just cannot justify,” says Rudy Wright, mayor of the city of 41,000 about 60 miles northwest of Charlotte. “We’re continuing to do the things our residents believe are essential functions of government.”
Recession-battered cities are moving beyond cutting or delaying major projects to close budget gaps and are slashing such quality-of-life functions as public safety services, library hours and after-school programs, a new survey of mayors shows.
About four in 10 mayors say they have cut maintenance and services at parks and gardens or reduced hours and staff at libraries, according to the Reader’s Digest-Harris Interactive survey of 54 mayors.
Things will get worse before they get better, the mayors say: Nearly 70% say they will reduce maintenance or cancel projects on roads, highways and bridges; 63% will cancel or delay planned building projects, and 41% will cut services or staff in police and fire departments.
“The recovery has been very slow,” Wright says.
‘800-pound gorilla’
Much of the pain playing out in cities is tied to employee salaries that often were negotiated during boom times and offset by funds from state and federal governments, says Tad DeHaven, a budget analyst with the libertarian Washington, D.C.-based Cato Institute.
“For the cities, the 800-pound gorilla in the room is labor costs,” he says. “For a lot of years, promises were made for local government employees — police, firefighters, teachers. I’m talking specifically about pension promises.
“Local governments are kind of in a bind because you need to be able to cut costs, particularly with labor, which is such a large share of their budgets, but you run into union opposition, and there are legal issues surrounding the ability to open up contracts,” DeHaven says.
Reader’s Digest commissioned the survey as part of its “We Hear You, America” initiative, which will highlight challenges facing the nation’s cities and offer $5 million in “stimulus” funds to select cities. Most of the funds will go to cities and towns that receive the most votes from residents at the Reader’s Digest website.
“We went in with the belief that there are still people that are hurting all across the country,” says Dan Lagani, president of Reader’s Digest Media. “What we didn’t expect was the amount of quality-of-life issues” being slashed nationwide. “The thing that so resonated is that three-quarters of the mayors said they expect 2011 to be a tougher year than 2010.”
Optimism in the air
Lagani says the survey also uncovered a lot of “classic American optimism” as mayors seek ways to keep communities strong.
Among steps they’ve taken: 63% say city employees are accepting early retirement or reduced overtime; 41% say volunteerism is increasing; and 22% are receiving private financial donations to help offset service cutbacks.
“We want to elevate the issue so other companies do the same thing (help cities),” Lagani says.
Mayor Jeanne-Marie Napolitano of Newport, R.I., says her city of 26,000 is forming partnerships with other communities to provide services such as fire protection. “It has been a struggle,” she says. “New England, and particularly Rhode Island, is known for being very independent.”
State aid could wane
Like other mayors, Napolitano worries that already-reduced state funding will be cut even further next year. “Our state is facing a $400 million deficit in the coming year, and there’s only a few places they can get it,” she says.
Laramie, Wyo., population 30,000, has cut some children’s programming at parks and recreation centers, furloughed most city employees and delayed some capital purchases and projects, Mayor Jodi Guerin says. “What we’ve done initially is try to do it (balance the budget) without cutting services as much as possible,” she says. “The way we’ve approached it this year, we’ve cut things that are non-revenue-generating.”
Meanwhile, in Hickory, Mayor Wright frets that the past is prologue:
“In the early part of the decade, the state permanently held $3 million of highway money,” he says. “We love our state, but we needed that $3 million. We fear that, with the state facing a $3.5 billion shortfall … that they’re going to hold money again.
“We face tremendous uncertainty here.”
By Larry Copeland, USA TODAY
November 22,2010
