Government spending? Consolidate assets first

26 Mar Government spending? Consolidate assets first

CHICAGO – The reality of the devastation in the economy is just starting to be understood by those in municipal and county governments.
Many state and local agencies are just beginning to wake up to the fact that revenues are down as they work on next year’s budgets. This recession should not come as a shock at this point, yet many government agency administrators are having trouble balancing the budgets and want to do the same thing they do every year – just request more money.
Many government administrators, as well as the state and municipal boards that they report to, are scratching their heads trying to figure out how to get more money rather than trying to figure out how to cut five or ten percent off of next year’s budget.
Few municipalities as well as states are in great financial shape. It is very easy to explain why. People have lost jobs; companies have moved out or cut back productions; and the tax base has eroded. If you have underemployment where someone eventually finds a job but is getting paid half of what they were getting before, they are not buying as much and sales tax revenues have gone down. There is a downward spiral in both sales tax revenues and payroll tax revenues.
Hold the line, or be let go
Sitting on a village board, you might hear: Do we raise water fees, sewer fees or up the garbage collection fees? Let’s add another dollar to movie rental fees. Some administrators say, “We can’t freeze wages, we can’t let anyone go and we must put the burden on the taxpayer- again.”
Some municipal boards buy off on that. They do not question or impose objectives to cut spending or at least hold the line on budgets. The same goes for state legislators.
It’s election time. Those types of boards and politicians should be voted out of office. Those types of administrators should be let go. It is not a matter of voting Democrat or Republican anymore. It’s a matter of voting for someone who is going to apply the same measures that you have done with your home and family: Cut spending.
What if your state legislature said we are cutting the state income tax in half because we found all the waste in last year’s budget? Where is the outrage in rewarding legislators and administrators with raises for not being able to cut budgets for years, if not decades?
Many people have been outraged with the federal government giving money away for $165,000,000 in bonuses to AIG, a private company, who needed to be bailed out with hundreds of Billions of dollars. Evidently, Congress was flooded with calls from both Democrat and Republican constituents saying that those bonuses were an outrage to the American taxpayer. Congress acted quickly because they felt rage from both sides.
Do we need to compensate government differently when it comes to solving problems and failing?
New approach for capital expenditures
With all the turmoil in Illinois’ budget deficit of $11 Billion or so, has anyone thought of “consolidating assets” instead of expanding duplicate assets and raising taxes?  Everyone in government seems to be trained in expanding budgets but few, if any, could creatively cut their budgets by 10% if given that is the only option. 
Raising taxes should be the last resort and not the first go-to option. Before asking the taxpayers for more money, find a better way to maximize resources.
Case in point : I spoke with an administrator of a local community college who was looking for more money for expanding their library. I asked, “How many libraries do we need?” We have public libraries and the college’s presentation about expanding the school’s library as part of a capital improvements program seemed like a duplication of efforts (and of course, tax money).
With the Internet, we can access any University’s library on-line. Why build a mediocre local school library when we can get access to University libraries like Harvard, Stanford, and Carnegie-Mellon, not to mention in-state libraries like Northwestern and University of Chicago? Is that too “high tech” for traditional administrators to fathom?
Why not work with surrounding municipal libraries then? Why not expand one and close down the community college’s library altogether? What if we could utilize the community libraries for the community college?  This idea of “consolidation” is probably very foreign to those that have always been on a separate funding mechanism, but at this point more creative approaches are needed.
To take it a step further into the 21st century, why not build a better network infrastructure to connect up to all those libraries rather than build one that is nowhere near the capabilities of a combined approach? Take all that money that would have been spent on expanding the library and build a super high-speed network to access 100s of libraries.
Bricks and mortar have given way to online capabilities. This has been proven in the last decade by companies like Amazon, all the on-line travel agencies and others. Let’s try to apply that concept to government agencies when we can.
How many administrators and their boards have gone through a planning exercise that looks at every service function that ranks the service in one of three levels?

• Critical
• Necessary
• Optimal

Just doing this would provide a good delineation of projects in prioritizing how critical they are in getting funded.
We need more creative approaches in ALL state and local organizations to maximize resources and not just keep doing the status quo where you think money is in unending supply.  Based on what we are seeing today – the money supply has stopped and the taxpayer is tapped out.  Those that think that the faucet has a never-ending supply of money better wake up and realize that it is almost dry.
Carlinism: Government must make the same sacrifices that individuals and households have done.
Recent columns by James Carlini

• James Carlini: The Chevrolet Volt: A product of the massive automobile bailout?
• James Carlini: Chicago Tea Party: CNBC commentator Rick Santelli defends the common man
• James Carlini: Media bias: Where do you really get the credible news today?
• James Carlini: Infrastructure stimulus packages, part two: Top 10 best practices
• James Carlini: Infrastructure stimulus packages: Best practices, Part I
• James Carlini: Stimulus package 2009: 21st Century infrastructure defined