Holding the Line on Spending and Taxes – Background
Reasonable taxes and effective services are as necessary for Manchester to retain and attract Middle Class families as any other issue. Taxes are directly tied to the cost of living for property owners and renters alike. Efficient, effective and responsive services are necessary for a good quality of life.
That said, it’s time to hold the line on spending and taxes. As mayor, I will!
For all the talk about the Tax Cap, spending and taxes in Manchester have grown well beyond what it allows. In just four years under Mayor Joyce Craig:
- Total spending in the city operating budget has jumped a whopping $25.2 million or 17%! (Includes one-time American Rescue Plan Act (ARPA) funds thru 6/30/2022.)
- Total spending in the school operating budget has soared a staggering $32.1 million or 18.6%! (Includes one-time COVID ESSR II funds.)
- Total revenue from fees is up $7.2 million, a 14% jump!
- Total property taxes collected is up $20.6 million, a noticeable 9.8%
- The $29.5 million difference between these massive increases in spending and the increases in taxes and fees is the funding cliff created by using one-time funds for ongoing operational expenses. Falling off this cliff means having to eliminate programs started with this one-time money, cut services subsidized by this one-time money and/or dramatically increase taxes to continue to fund any of the spending that’s dependent on this one-time money.
- This is the very definition of fiscal irresponsibility!
The average increase in taxes is 2.45%, which is significantly higher, about 70% higher, than the average increase allowed by the cap over the past 4 years.
What results have come from this higher spending and taxes? What does Manchester have to show for it?
- Persistently high crime, especially violent crime, making Manchester LESS SAFE than 86% of cities across the country.
- Increasing homeless vagrancy and panhandling.
- Rising overdoses and deaths.
- Plummeting student test scores that make it seem as if there’s a “race to the bottom.”
- Disastrous, but understandable drops in student enrollment.
Taxpayers also took a big hit when the Board of Aldermen agreed to the mayor’s ordinance change that allowed spending of city surpluses on severance payouts to employees upon retirement instead of having those funds go back to the taxpayer or be paid into the city’s Rainy Day Fund. As mayor, I will revisit this issue to reduce spending.
The Tax Cap
The voters of Manchester have stood strongly behind this restraint on spending and taxes at every opportunity. As mayor, I will neither propose nor support any budget that exceeds the cap. It must and can be honored.
But there’s more to it than that. I support the cap because government has little incentive, if any, to become more efficient, effective and responsive to those who pay the tax bill. Government simply raises taxes and spending to do the same things “the way they’ve always been done.” A company in the private sector that behaved this way would be out of business at the hands of innovative competitors that found ways to do better.
The problem with the tax cap is not that it “strangles” the city’s ability to solve problems by limiting taxes and spending. It’s that elected leaders, especially Mayor Craig, who as mayor and as an alderman led every successful Tax Cap override vote, have failed to ask even basic questions, such as:
- What is a better way?
- Should the city be doing this?
- Does this need to be done at all?
- What results are we getting for the money we’re spending?
- What’s the goal of the spending?
- How do we know it’s working?
These are just some of the questions elected leaders, especially the mayor, should be asking of every department, agency and grant supported organization.
As mayor, you can count on me asking these and many, many more questions! I have the background and expertise to do it and a track record that proves I have and will.
Federal Covid Funds
Manchester received $43 million from the federal government to “recover” from COVID-19. These are one-time funds that the mayor largely used to fill gaps in the city’s operating budget, create new programs with new employees and extend grant funded positions without any assessment of whether or not the positions were worth continuing.
Many have asked what I’d do with the money. Honestly, it’s hard to say as the final rules for its use won’t be made public until August 31, 2021. What we do know, though, is there is plenty of time to make decisions on how to use this money since it doesn’t need to be allocated for another 3 years! As a guiding principle, I would use one-time funds for one-time expenses, not the expansion of government and its payroll.
From the information I’ve been able to review, it looks like money could be used to renovate and upgrade city parks and trails, many of which need attention. If this understanding is accurate, as mayor, I would allocate funds towards such projects.
There is a clear ability to fund water, sewer and drainage projects, of which the city has many. As the rules stand now, the only roads that can be repaved are those disturbed by these projects. As mayor, I would strategically fund these projects
Finally, the rules allow “premium pay” for “essential workers.” If this allows us to pay any essential worker that might be needed to help turn the corner on some of our quality of life issues, I would target funds to address areas with persistent problems. As mayor, areas I’d consider include:
- Targeted police enforcement
- Clearing homeless vagrant camps
- Removing brush, hauling debris, cleaning up alleyways, trails, parks or after homeless camps, installing lighting or eliminating graffiti, etc
As mayor, I would be adamant that one time money be used for one-time expenses or, at worst, targeted short term initiatives designed to improve the city’s ability to fix quality of life issues. The same goes for the school district. With $58 million in one time money on its way, we must be committed to one-time expenses that will not cause even more budget bloat than what you’re about to read!
As additional state and federal funding has flooded the school district ($47 million spent so far with another $58 million on the way for a total of $105 million), the district has done nothing to adjust its operations to reflect the steep decline in student enrollment. While some of the money has been spent on dealing directly with COVID issues, a large percentage of it has subsidized or expanded ongoing operating expenses. Among the budget holes filled in the current fiscal year with this federal money was the loss of $6.7 in one-time state money used last year to subsidize the operating budget.
The district also projected losing $5.2 million in state education aid due to the deep decrease in student enrollment caused by its failure to reopen schools in September. However, the state budget didn’t cut funding, meaning the district will see no decrease in state funding this year, which begs an important question: What will be done with this unexpected revenue windfall of $5.2 million? Will Mayor Craig reopen the budget to spend this revenue windfall or will she apply it to the tax rate when the Dept. of Revenue Administration sets the tax rate?
As mayor, I would use it to lower the tax rate. My bet is Mayor Craig will move to spend it, which will push the budget to total increase in school spending since Joyce Craig was elected mayor four difficult years ago to $37.3 million or 22.6%.
Moreover, what will become of the $58 million in one-time COVID relief dollars that’s on its way? Will she rush to spend it as she did with the $43 million received for the city budget? Will it subsidize operating expenses? Create new spending programs? Be used for one-time expenditures?
As mayor, I will push to dedicate this one-time money to one-time expenditures (such as building repairs and upgrades) where allowed. Where not allowed (we have to wait for the final federal rules), I will fight to make sure it’s used for targeted, specific, short term initiatives to assist students who fell behind because of how the district handled the pandemic.
Having served four years on the Committee on Finance, including two years as chair, I could go on at length about what I’d change about how the district allocates a variety of resources. It’s often territorial, archaic and inefficient. However, as mayor, I will focus on aligning resources to support my innovative proposal to create the Manchester Educational Marketplace which I am confident will bring spending under control by design, as funding will follow innovation and reward the actual results produced by each individual school.
Changing the way the city does business: A key to managing expenses and limiting taxes
The next term is going to see a significant number of expiring labor union contracts. As chair of the school board’s Special Committee on Negotiations, I led the efforts to negotiate new agreements with the school district’s unions. I am very proud to say that the problem solving approach we took to negotiations helped keep our committee unanimous in all that it did over those two years. Considering the very diverse political opinions, approaches and interests represented by members of the committee, this was a true accomplishment.
In learning about the working conditions and day to day issues experienced by our employees, we came to understand many of their challenges and opportunities. Because we listened, they were more attentive to the concerns the district and the board needed to address. Because we were willing to help solve their issues, which weren’t always about money, they were more open to our need to create contracts that were financially sustainable. We made it clear, and they understood, that we were going to stay within the Tax Cap. As mayor, I will make that same objective clear.
We succeeded in settling two contracts, one with the principals, the other with the para-professionals. There were fundamental changes to health, sick and retirement benefits that provided both the district and the employees with savings while improving options and freed up funds necessary to address salaries, which were restructured, all within the Tax Cap.
Where we weren’t able to come to terms, notably with the teachers, we held firm on staying within the tax cap, stayed focused on resolving the issues shared by both sides and made all of the negotiations data public after they walked away. We even presented all of our information at a special meeting of the school board so that everybody who was interested would know what each side proposed and why the negotiations failed. There was no guessing about who did what. It was all made public.
As mayor, I will bring this same open, focused, accountable, transparent, problem solving approach to negotiations. We can negotiate good contracts that respect both our taxpayers and our employees.
One way that elected officials have to determine whether or not city services are being provided in the most cost effective manner possible is something called “competitive bidding.” Simply put, this is a process that allows the city to compare the cost of its operations to those in the private sector. In the past, this has provided both great savings and improved services to the taxpayer. Notable successes include trash collection and street sweeping. While the city department responsible for both maintained the right to do the job, it dramatically cut costs and improved service in order to compete and keep the work in-house. It’s been about 25 years since anything like this was done! It’s also a good way root out any cronyism or cozy deals.
As mayor, I will use this tool wherever possible to ensure that the taxpayers receive the most cost effective, efficient and responsive services possible.
Improvements in technology are often pushed aside because of their initial cost. I have seen this first hand, especially in the school district, and believe it is usually incredibly short sided as it often overlooks productivity gains, new functionality and greater efficiency.
As mayor, I will appoint a task force to conduct a full assessment of our technology needs and develop a plan to meet them, specifically in areas that will enable more cost effective, efficient and responsive operations.
Management and Operations
While technology can help improve operational efficiency, it’s time for an assessment of how various departments are structured and operate.
Manchester is a huge business with operating, school and enterprise budgets totaling well over $400 million dollars. The demands for funding from its 19 departments, the school district, which is more than half of the operating the budget, and 4 enterprise agencies are intense and not for the inexperienced.
During my time in service to our city, I developed, proposed or otherwise was part of creating 9 budgets. This is something I did as a mayor’s aide, alderman and school board member so I understand it well from all vantage points. I know the numbers and how the process can and must run to ensure fiscal transparency, accountability and restraint, all of which is necessary to reduce spending if taxes are to be kept in check.
Every department, agency or grant recipient of the city will make the case about why it needs more. The trick is not to disprove that, though it can and should happen when appropriate. It is to align spending with priorities. To do this, a mayor must know the numbers and how the budget works. Here, my record speaks clearly for itself.
For my familiarity with city operations, I would draw off the many professionals, business owners and other operational experts in our city to appoint an Efficiency Task Force that would review every department’s operations, management practices, union contracts, safety and worker’s comp. practices and things like the procurement code (purchasing processes) to make recommendations on ways the city could be more efficient, effective and responsive.
In my business life, I often say to my clients, “show me your checkbook and it will show your priorities”. In reviewing their spending, we often find little things, habits, practices or patterns that needlessly and unknowingly divert cash needed to meet their current needs and reach their future goals. This awareness is usually followed by changes that save them the money the need for both. Given my professional background and my strong and extensive experience with city and school budgets, I know this is true of our city and it underlies why I believe Manchester can and will meet its needs within the Tax Cap. All it needs is the right leadership!
As mayor, I’ll provide that experience based, informed and tested leadership to restore fiscal responsibility at City Hall.