Tuesday , 29 July 2014
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Shortsighted budget game costs county in long run

The Miami Herald headline read: “Moody’s downgrades part of Miami-Dade’s credit.”

The mayor and the county commission played games with the county budget and now we can look forward to paying higher interest when we borrow money in the future. We saved a few dollars today but will pay heavily in the future.

County Mayor Carlos Gimenez, when creating the new county budget proposed a small millage rate increase to cover the higher payroll costs won by unions in ending worker contributions for their healthcare. When voters took to talk radio blasting the mayor for increasing their real estate taxes, Gimenez quickly acquiesced, rolled back the proposed increase and announced the need to invade county emergency reserves to cover the shortfall.

Moody’s reviewed the proposed invasion of the emergency reserve, determined that it was a sign of a poorly designed budget and by inference accused the county of bad fiscal management. The result, they rolled back their rating of the county from “stable” to “negative.”

How much will this debacle cost the taxpayers — you and I? According to the county’s own budget department the downgrade will cost us $120 million in higher interest over the next 30 years. Who will pay the $120 million: The taxpayers who saved a few dollars in their real estate tax bill. Actually, we are dumping the “extra” $120 million on our kids so we can save a few dollars today.

Now, that’s what I call planning!

We must realize that as the cost of government goes up so must we pay more to cover the increase. There are only two ways to handle this situation — increase revenues or reduce services and efficiency in government.

Reducing services is easy. The mayor and the county commission merely select where the cuts are to be made, announce the reduction and sit back and take the ire of those affected by the cuts.

Cuts take two forms: Reduced services, which anger the population, or reduced staff, which angers the unions and nonunion employees. Either way the mayor and the commissioners are punished by the voters at the next election, or, if sufficiently angered, by a recall. That is the “politics” of running a government.

Reducing costs, properly called “creating efficiency” in government is a very difficult task. How often have we heard a candidate for office say: “I successfully ran a major corporation and will create government efficiency and reduce the cost of government if you elect me?”
Florida Gov. Rick Scott is a prime example. Like his politics or not, you must recognize that his attempt at creating efficiency in government, as he did in private corporate life, isn’t working.

In private industry, the president (our mayor) and the board of directors (our county commissioners) plan the course of action that they feel will result in a successful, profitable business. Keep costs down, make a profit and the stockholders are happy.

Duplicating that procedure in government isn’t that simple. First you hold the position of mayor or commissioner at the will of the voters. Your future is decided by the citizens of the community, not by a proxy vote in private chambers. In the corporate world you eliminate unprofitable operations and concentrate on making a profit. In government you must continue even the most expensive departments even if the cost isn’t recognized and approved by the will of the people.

In the private sector you operate behind closed doors where making corporate decisions are easy. In government you operate in of the media where your every move makes headlines. Nonetheless, the managers of our government have the responsibility of watching the cost of government and standing by their convictions, telling us, the taxpayer/voter, the real story.

This time the mayor and the commission missed the opportunity of telling us the truth, the real story and standing by an unpopular but necessary decision.

This error in management will cost us an extra $120 million over the next 30 years. Managing a government isn’t easy, but they asked for the job.

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