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What’s really heartbreaking about Bertha’s situation is that once pressed to do so, she managed to get her annual budget down to below the amount she makes per year. Had she taken that simple step 15 years earlier, she wouldn’t be in this terrible position now.
In the case of the city, Mayor Sanders managed to pull Bertha’s budget from $55,000 down to, say, $48,000 via improved management. That’s a direct result of Business Process Re-engineering (BPR). Getting from $48,000 down to $46,000 is involving sacrifice which is what the council is having so much trouble dealing with.
Ultimately, though, we have to get down to $42,000 which is going to require a lifestyle change on Bertha’s behalf. At the city, we call those “service level cuts.”
I simply do not buy the notion that we can get where we need to go without them.
This also throws water on the notion that as a city, we simply aren’t paying enough taxes. Yes we are. We are providing $50,000 worth of income. Were it not for the monstrous debt payment, we would have $50,000 to spend on the things we would like to have. That’s the $48,000 “comfortable” expenditure level with an extra $2,000 left over for lifestyle enhancements or (gasp) setting aside money for future needs We would not need to sacrifice. That, however, isn’t our situation. We spent and spent and spent … and now we need to pay and it’s painful.
One of the comments to my earlier posting has to do with the fact that city employees lose ground when pay rates are frozen but the cost of living goes up. That is absolutely true. There is, however, a difference between needing and/or deserving a pay raise and the employer’s ability to make such a payment. If Bertha does not get her budget down to $42,000, her debt will compound and she will either have to make even more drastic lifestyle changes or she will go under.
This mess started under Golding and was ignored by Murphy (until it was too late). Any debt compounding at 8 percent is deadly. Only political forces would cause otherwise intelligent leaders to ignore that fact.
— APRIL BOLING