The city of Columbia’s Finance Department provided some informative public education sessions earlier this year. For the 99.99 percent of readers who didn’t have a chance to attend, here’s an executive summary.
The first public presentation in January was a PowerPoint describing that this new initiative intended to “Educate … Engage … (and) Empower.” Well, that sounds pretty good.
The main takeaway for Budgeting 101 for a concerned citizen is that the $500+ million big budget actually consists of a bunch of subsections. Primarily the general fund was plainly described as, “What you typically think of when you think of local government.” Which “can be used for a variety of purposes,” mainly general personnel, and public safety like police and fire.
There are also multiple enterprise funds — basically city-owned business entities – that keep their own separate books.
Every town worth its own salt has these things, like streets, sewers, and parks. But City Hall here has long touted itself as a “full-service city,” which sounds impressive, though it really means local government has socialized many a function that in other places private companies are allowed to do.
Our local municipal government runs an electric company, a trash collection monopoly, an underused bus program, a parking utility, and even a railroad spur.
A telling slide forecasts a slight budget shortfall trend, starting about fiscal year 2027. Revenue growth levels out — but darn it if expenses keep rising. Director of Finance Matthew Lue poignantly paused there and calmly advised that the community will need to have conversations coming up about how to fill that gap. Well noted, sir.
In fact, session two in February was more Montessori style with a hands-on small group activity. The “Civic Spending Exercise” was borrowed from a county in Florida. Assuming you had a draft budget outlined, word comes that you’re projected to have a 5 percent budget shortfall (sound familiar?). So some lists of possible budget amendments were pondered upon to close the gap.
Our table was comprised of model citizens, if I may say so, alternating between budget cuts and tax increases, a very balanced approach to deficit reduction — which does not sound like anything in reality today. Ahem.
The first couple of items were pretty easy to find consensus on. But further down the line, we had to go by the process of elimination, and that yielded split votes. Finding that last percent of savings inspired one mock Council member to lament, “Oh, we can’t cut THAT!”
There was one head-scratching side comment Director Lue offered, about how it’s sure a good thing City Hall runs all these utilities in “the public interest.” Because there’s some for-profit company, American Water, that’s been going around the countryside buying up public water utilities and jacking up rates on ratepayers by 30 percent!
Since then, at an unrelated luncheon elsewhere in town, I quizzed David Stokes, director of municipal policy with free-market think tank the Show-Me Institute, about this supposed trend. He said utility rates are generally overseen by a public service commission, but rate increases might very well be negotiated as part of a purchase deal, particularly when the pipes or wires they are inheriting have been very under maintained in the past
Oh, that reminded me of a side chat with a former City Council member over a decade ago, who discovered firsthand our city’s pipes and wires were not properly kept up, and if it were not so unpopular, would raise rates by 10 percent immediately. Just to start to close that gap.
While less easy discussions are indeed overdue, brace yourself for a barrage of tax increase proposals in the coming months. If so, let’s reasonably balance those with spending reductions, too.
