Our View | Time to think outside the budget box


Pretend for a minute that you run a business. Your business finished last year $43 million in the red, with economic prospects for this year only nominally improved. How do you keep your business afloat?  Surely not by increasing your spending by $4 million rather than making real spending cuts, nor by giving all of your employees an average wage increase of more than $2,000 yearly.

No, a privately owned company couldn’t operate in that manner and expect to stay in business. 

Unfortunately, government can and does, which is one reason why Alexandria’s proposed fiscal year 2011 budget includes a property tax rate increase of seven cents and other increases to close the gap.

No, the city government is not a business. Businesses exist to make profit; they are not responsible for the education, public safety or social service functions with which the government deals. But yes, the government could learn something from industry. 

Businesses sometimes have to make painful spending and personnel cuts to stay in business and to prepare their companies to succeed. Paring away unnecessary or outdated functions and departments in lean times helps prepare the company to succeed in the long run. When companies don’t make these difficult decisions, they set themselves up for long-term failure.

The trend in recent years has been for other entities, non-profit organizations in particular, to operate more like businesses to maximize dollars and effectiveness. They, like companies, have had to move in this direction because of limits on their funding and revenues. Entities such as Venture Philanthropy Partners and the Alexandria Community Trust both founded and run by business leaders work with non-profits to help them become more efficient. These charities operate more like businesses not to make a profit but to stretch each dollar that they receive in order to better serve their clients.

It is a difficult balancing act Alexandria’s government is undertaking right now, trying to make up large budget deficits while continuing to maintain the very high level of services for which our city is known. Our city does many things well, as the very able response to the two recent snowstorms attest: Compared to surrounding communities our streets have opened quickly.

But in the budget that was proposed at Tuesday’s City Council meeting, the starting premise for balancing the budget apparently is to ensure that no current city workers lose their jobs. How else to explain the trimming of 67 empty (or soon-to-be-empty) positions and only the possibility of layoffs? That means these positions are being eliminated in a random manner, wherever vacancies naturally occur, rather than in a strategic manner where functions are determined to be less important. Surely there are city departments that could be eliminated and/or consolidated even if it means layoffs.

It is also true that in order to attract and retain good workers, competitive wages must be paid. City employees have not received merit-based step increases for three years, until now, and the budget asks employees to pay anywhere from $192 to $868 more a year in health insurance premiums. Further, a study found many Alexandria employees to be paid below the regional average, will be in vain this year, because there is no pay upgrade scheduled for these employees. Why not audit each department, strategically trim unnecessary positions and provide better pay for a smaller number of employees?

No one wants to see friends and colleagues lose their jobs, yet surely we all know someone in the private sector who is unemployed due to our lagging economy. While Wall Street CEOs may be continuing to pull down enormous salaries, many to most working people aren’t getting raises in this economy. Making budget reductions in a conventional manner, as is being proposed in Alexandria, means that preserving the jobs of city workers many of whom do not live here comes first and taxpayers and efficiency of services comes after.

Tuesday’s budget proposal is the mid-point, not the end, of discussions on next year’s city budget. Fortunately, time remains for citizens to express their proposals to city hall before the budget is final, as our city’s budget process is open and transparent. An increase in Alexandria’s property tax rate is probably inevitable given the decline in property values, and thus revenues. 

But any increase in the tax rate needs to be accompanied by real budget cuts not just a reduction in additional spending. It is time for our city planners to think outside the box in their approach to balancing the budget. That means everything, including the positions of current workers, should be on the table for consideration.