He said he’d just gotten an email from Tom Leppert saying I wanted to raise taxes, and my friend wanted to understand why.  He recalled that I have a track record of being fiscally prudent, even when the mayor has not.  He knew I’d stood against the mayor when he raised taxes by $100 million his first two years in office, and that I’d warned against his crusade to run up too much debt, too fast.  So he figured I wouldn’t be supporting a tax rate increase without a good reason and he wanted to know what that was.

So I’m going to tell you what I told him.

We’re at the point where further service cuts will damage our city.  Our streets are in terrible condition, our parks are overgrown and unclean, and our rec centers, pools, and libraries have been cut to the bone.  And that’s before the proposed cuts for next year.  Continuing on this path will do long-term harm to our city.

Taxpayers rightly want our city government to be efficient and hold the line on expenses.  And adjusting for inflation, our operating budget is the lowest it’s been in at least ten years — even when you include our proposed tax rate increase.  At the same time, funding for basic city services has taken a nosedive over the last decade.  Our streets have become littered with potholes because we’ve cut the budget for street maintenance in half over the last ten years.  Our parks budget has gone down by 38% and our libraries have been reduced 48% over the same period of time.

All these cuts have taken a toll on our infrastructure and will end up costing taxpayers more in the long run.  For example, if we don’t invest at least $12.3 million in basic street maintenance this year and instead defer it for the third year in a row as the mayor proposes, it’ll cost taxpayers nearly double that the following year — $21.3 million — just to catch up.  If we put it off another year after that, it’ll cost us almost triple — $36.1 million.  Now that’s just penny wise and pound foolish.  Putting off maintenance only makes sense if you don’t plan on sticking around when the bill comes due.  But for those of us who intend to stay and raise our families here in Dallas, we’ve got to put the long-term health of our city first — and put political ambitions aside.

While our investment in basic city services has plummeted over the last decade, our debt has grown at an unprecedented rate.  As a result, we’re paying as much as 62% more to cover our debt compared to ten years ago.   While the mayor has consistently voted to borrow more and more money (increasing taxes as a result), I’ve voted against borrowing too much, too fast, particularly in a bad economy, noting that basic city services could suffer as a result.  Those concerns have proved prescient.

A decade ago in the 2000-01 budget, we were spending two-thirds of our operating budget on debt, police, fire, and sanitation, leaving one-third for everything else — streets, parks, libraries, code, etc.  But today, the proportion we’re spending on debt, public safety, and sanitation has grown, now taking up over three-quarters of our budget.  That leaves less than a quarter of our budget for everything else.  In real dollars, we’ve got $154 million less to pay for “everything else” than we had ten years ago.  Add to that a shrinking overall budget — $1.2 billion instead of $1.3 billion — and we’ve got ourselves a serious threat to basic city services.

If you’ve driven our streets lately or visited a park, you know we’ve got to turn this ship around.  In the late 1980s, the city deferred maintenance with long-term, devastating results.  Today we are still trying to dig ourselves out of that hole to the tune of an eleven billion dollar needs inventory.  We cannot make the same mistakes again.

The service restorations that the majority of the council supports are prudent, focused, and necessary.  They address our most basic needs while ensuring fiscal responsibility:

• Street maintenance: We’re restoring $15.2 million for basic street maintenance, allowing us to maintain 500 lane miles instead of only 123.
• Roadside clean-up: Instead of mowing and cleaning our 5408 acres of roadsides only 4 times/year, we’re adding $6.4 million to mow and pick up litter a total of 22 times.
• Park mowing: Instead of mowing our parks every 28 days, we’ll mow them every 10 days.
• Park clean-up: We’ll pick up litter 4.5 times/week instead of only 1.5, and we’ll clean up graffiti rather than let it mar our parks.
• Rec centers: Our large centers will be open 55 hrs/wk instead of 45, our small centers 40 hrs instead of 30, and we’ll maintain all current rec center programs.
• Swimming pools: We’ll keep 16 neighborhood pools open instead of just 7, and they’ll be open three additional weeks (until school starts).
• Libraries: We’ll maintain staff and programs at our neighborhood libraries.

To preserve roughly $40 million worth of basic city services, we propose raising the tax rate $.0491.  Though the city will actually be taking in less property tax revenue due to falling property valuations, these service restorations will cost the average homeowner an additional $64 on their tax bill.  The average business owner’s taxes will actually go down.

To ensure your tax dollars get spent exactly as we have proposed, we will provide quarterly reports on the city’s website detailing how much has been spent on each service, details about the expenditures, and how much is remaining for each.

Despite these restorations, the city is still tightening its belt.  Our operating budget will be the smallest it’s been in the past decade.  We are making reductions in every department, lowering every employee’s salary, and cutting city staff.

Let’s be frank. It’s never politically popular to suggest a tax rate increase. Some of our city’s political leaders are now trying to feign fiscal conservatism after years of raising taxes, running up our debt, and funding elaborate bridges, government-owned hotels, and submersible toll roads. But it’s time to put politics aside and do what’s best for Dallas, not what’s best for one person’s political career.

To that end, we cannot simply close our eyes to the deteriorating infrastructure around us and do nothing. The modest restorations that we have proposed balance long-term fiscal responsibility with essential city services, allowing us to keep our streets maintained, our parks clean, and our rec centers and libraries open. It’s the right thing to do for Dallas.

What I found were some difficult, but necessary, reductions: across-the-board pay cuts for city employees, the elimination of less essential city services, and painful reductions in every city department. Tough cuts, but necessary in this economy.

But I also found troubling reductions to basic city services like streets and parks and libraries. When I met with constituents at recent budget town hall meetings, they echoed this concern. They’re tired of crumbling roads and don’t want to see essential street maintenance eliminated for the third year in a row. They don’t want 2/3 of our city pools closed for the summer. They don’t want hours, staff, and programs at our rec centers and libraries eliminated. They don’t want our parks filled with litter and overgrown grass.

So yesterday, seven of my colleagues and I put forth a proposal that will restore some of these basic city services to next year’s budget. I’ll have more to say about this in the coming days, but here’s the short version: We’re restoring services without raising property taxes. Property values have gone down, so we’ll be bringing in less property tax revenue and doing more with less. Salaries will still be reduced across the board and employees and services will still be cut in less essential areas. The budget, even with our modest service restorations, will still be smaller and leaner than last year. But our parks and libraries will stay open, and our infrastructure will not continue to deteriorate.

The amendments to the budget that my colleagues and I have put forward are targeted, prudent, and necessary. If our goal is to maintain city services while not raising property taxes, the amended budget solves this difficult problem.

And yet the mayor attacked our proposal even before it was put forward. He disingenuously cautioned his supporters that “we must not start the habit of raising your taxes” — surprising coming from someone who’s never met a tax increase he didn’t like or a pet project he could do without. But then it hit me. There are two Tom Lepperts: Candidate Leppert and Mayor Leppert.

Candidate Leppert pledges no new taxes. Taxes are for the the fiscally-irresponsible. Remember his famous campaign mailer back in 2007 with the ATM on the side of city hall, mocking the mayoral wannabes who would raise taxes? He looked us all square in the eye and pledged he’d never do that.

Until he got elected. Then the first thing Mayor Leppert did was raise your taxes. By over $65 million.

But that wasn’t enough. He dug into your pockets again the following year to grab another $39 million.

And now he’s got the gall to criticize our modest proposal to restore basic city services to keep our city from deteriorating even further without raising taxes. Of course Leppert knows we’re not raising taxes — that the increased tax rate we propose brings in LESS money to the city than last year. He knows property values have gone down and that the average property owner will pay less in property taxes to the city this year. He’s a smart guy — he knows all this.

But now he’s in Candidate Leppert mode. He’s running again for mayor or perhaps U.S. Senate or maybe both. He’s struggling to get some street cred with his key demographics and make you forget that he raised your taxes by over $100 million in the last three years. He also doesn’t want you to remember that he increased our city’s debt by $500 million while funding vanity projects like extravagant bridges and city-owned hotels, not to mention his dreams of a submersible toll road.

So Candidate Leppert will say what he needs to say to get re-elected and win the hearts and minds of his base. But don’t be fooled into thinking that his spin in any way represents reality. The majority of this city council heard you when you said you didn’t want to further cut basic city services like park maintenance and street repairs. We heard you when you told us not to shutter your pools and libraries. And we’re restoring these important services while lowering taxes.

And let me make my record clear: When Mayor Leppert was going on his tax-and-spending sprees, Councilmember Mitchell Rasansky and I staunchly opposed him. We, alone, pushed to hold the line on taxes. We recommended cuts and savings and better uses for your tax dollars. But Mayor Leppert, like Candidate Leppert, would not be deterred. He is adept at spinning, and so he spun. And got his additional $100 million in property taxes from you.

So the next time Leppert tells you something, ask yourself, is this Mayor Leppert talking or Candidate Leppert? Because I’ve figured out the difference and I’m going to make sure you know it, too.

Tuesday, August 24th
6:30 p.m.
Frontiers of Flight Museum
6911 Lemmon Ave.

To review the City Manager’s proposed budget, visit www.dallascityhall.com.

Thursday, August 12
St. Thomas Aquinas
6306 Kenwood

The proposed budget can be found at www.dallascityhall.com.

We need to move forward on bond projects which are critical to maintaining and improving our city’s infrastructure. We’ve seen what can happen when we are derelict in our upkeep — we face more expensive fixes in the future. We can also recover substantial savings on projects we undertake right now while construction costs are down. But we must be very judicious and conscious of what our city budget will look like next year, and borrow only the amount of money we can afford. This year’s budget cut not just fat, but muscle and bone. We laid off employees, cut city programs and reduced services to our citizens. For next year’s budget, we’ll have to cut even deeper if we don’t want to raise property taxes. Given that reality, it doesn’t make sense for us to dig ourselves $6.8M deeper into the hole.

Instead, we should borrow slightly less money this year so that we won’t have to pay more in debt payments next year. We could reduce the March tranche of bonds just slightly (to eliminate the $1.3M in next year’s additional debt service) and reduce the October commercial paper sale a little more (to eliminate the $5.5M in additional debt service). When we get a better idea of our financial condition in the coming year, we can consider rescheduling any delayed project as soon as it’s financially responsible and we can afford it.

For these reasons, I voted against the city manager’s proposal, which will increase our budget expenses by $6.8M next year. (All other councilmembers supported the proposal.)

I know what you’re thinking. “Wow, Angela, you must be psychic. How else to explain your eerily accurate prediction one year ago that the impending economic recession would reduce revenue to the city, reveal the city’s budget forecast as overly optimistic, and necessitate mid-year service cuts?”

Indeed, how else to explain it other than telepathy?

I began dabbling in the clairvoyant arts last year around this time in an effort to see into our city’s financial future. I started out by reading tea leaves (and by “tea leaves” I mean “newspapers”), which foretold ominous fiscal tidings: Lehman Brothers would file for Chapter 11. AIG would go down in flames. Bank of America would take over Merrill Lynch.

And that wasn’t all. My crystal ball/television revealed more otherworldly insights: Fannie Mae and Freddie Mac would be placed in conservatorship. Congress would plunge $700 billion into Wall Street to try to stop the hemorrhaging. And Washington Mutual would become the largest bank failure in American history. Ahem.

All of these things came to pass just days before the City Council approved last year’s budget. I shared these mystical insights with my colleagues and urged them to reconsider the budget before them — a budget that relied on optimistic revenue projections.  I, along with Councilmember Rasansky (who himself often evidenced an uncanny prescience in financial matters), suggested a more conservative budget and proposed $45 million in cuts.

I warned my colleagues that if we failed to read the signs and portents and Dow Jones, if we failed to make the tough cuts now, we would be forced to make even more difficult budget cuts in six months due to lower than expected revenue. We could either plan for the crisis or let the crisis overtake us. It would mean the difference between thoughtful, targeted reductions that spared core services, versus reactionary, hacking cuts to any program or office with unspent funds.

Unfortunately, the rest of the council and the mayor scoffed at my and Mitchell’s grave prognostications and passed the unrealistic budget over our protests.

Six months later, sales tax revenue had dropped so far below budget projections that City Manager Mary Suhm instituted a hiring freeze and began cutting the budget.  That’s tough to do mid-year, especially under such exigent circumstances. And by the end of the year, it turned out that the city had overestimated revenue by about $45 million.  Too bad nobody saw it coming.

So here we are, a year later, about to approve next year’s budget, and I’ve got some new predictions.

I’ve been staring into this budget for weeks, and here’s what I see:  The city is going to get into too much debt in the coming year — borrowing $355 million.  That won’t hurt too much next year, but it could devastate us the following year when our debt repayment goes up by $24 million.  (To put that in perspective, that’s the entire budget for our streets department or our code department.)

Where will we get this money?  That’s when my powers of insight fail me.  Short of raising taxes, I can’t foresee any way to cobble together the additional millions of dollars that will be needed to repay our debt.  We’ve already cut our budget to the bone; cutting another $24 million would reduce city services to an unacceptable level and might actually threaten our infrastructure.  Since there’s no reason to believe we’ll be getting additional revenue, where is this money going to come from?

We can avert this crisis by paring down our debt as we weather this recession.  Let’s borrow $140 million next year instead of $355 million.  We’ll still be able to complete plenty of bond projects, but we won’t increase our debt repayment the following year.  We can extend our bond program by a couple of years, and make it through these tough times without saddling our citizens with crippling debt.

Unfortunately, I don’t see that in the cards. Instead, I have a vision of our mayor and City Council making a grave mistake in passing a budget we can’t afford, and Dallas taxpayers suffering the consequences.

On a totally unrelated note, this came to me in a dream last night:

The harbinger of mutual destruction will wear a spotted cloak
and plunge a great city into dark indenture.
Caution will be rewarded as treachery.
Vassals shall wither under false levies.

No idea what it means.

Below is a 45-minute video of my budget presentation to District 14 residents last week.  Like last year, I created my own Powerpoint to explain the city’s budget in what I hope is a comprehensible way.  If you’d like to see just the slideshow, you can view it here.

If that’s still not enough for you, you can peruse my handy Excel spreadsheets that I created to analyze the budget.

I hope you find this helpful.  As always, I welcome your feedback.

Take next year’s proposed city budget.  I’ve been through this thing line by line, with a fine-toothed comb, ever since we got the “final draft” in early August.  It’s a lot to digest.  Lots of numbers and all.  But some numbers are more important than others, and right now I want to focus on debt and its effect on our bottom line.

The city borrows money to make major infrastructure improvements, like constructing new libraries and police stations, building new roads, putting in new playgrounds in our parks.  These are bond projects approved by voters.  When we borrow money for these projects, we’re essentially putting them on the city’s credit card.

As with any credit card, the city has to make regular payments.  Next year, our credit card bill will be about 22% of our entire operating budget.  It’s the largest expense after police.  Take a look:

Next year, the city manager proposes to charge an additional $314 million to our credit card.  The critical question is: How will that affect our credit card payment? Well, it won’t make much of a difference next year.  It’s the following year we have to worry about.

See, if we decide to borrow $314 million next year, then the following budget year we’re going to be up a creek without a paddle.  Our credit card payment will jump by $24 million.  TWENTY-FOUR MILLION DOLLARS.

Why am I shouting?  Because I’m worried about this.  Really worried.  Because if we have to spend $24 million more on debt repayment, that means $24 million less that we’ll have for all our other city services:  police, streets, parks, libraries, code, the arts, etc.

It’s just like your household budget:  The more stuff you buy with your credit card, the higher your monthly credit card payment.  In this economy, you probably aren’t going to be getting a raise. So assuming your income stays the same, a higher credit card payment means less money you can spend on groceries, gasoline, the light bill, etc.

The same is true for the city. The more debt we incur, the higher our debt payment and the less we have to spend on the basics (assuming we’re not rolling in more money in two years, which I doubt).

So my question is pretty simple:  Where is this additional $24 million supposed to come from?  Property and sales tax revenue is likely to remain down, so more money won’t be flowing into the city coffers.  And we’re already cutting muscle and bone in the upcoming budget — laying off 840 city employees, cutting back library and rec center hours, combining city departments, dipping into the city’s rainy day fund.  Seriously, where are we supposed to get $24 million in 2010-11?  Look at the pie chart again.  Where are we going to get $24 million?

There’s a simple solution.  If we just cut our credit card purchases down to a “modest” $125 million next year, our credit card payment the following year will stay level.  Makes sense, right?  Don’t increase your credit card bill when money’s tight.

I brought this up at last week’s council meeting when we were discussing the budget:  We’re about to dig ourselves into a bigger hole, I said.  A $24 million hole at a time when we’re looking for pennies in the couch.  Bad idea.  Only Councilmember Ann Margolin shared my concern.

I went over to the mayor, thinking, “He’s a business guy.  Surely, he gets this.”  Instead, he did that thing he does when he wants to dismiss any opposition.  You know the thing I’m talking about.  It goes something like this:

“We must do [X] to make Dallas a great city.  If you oppose [X], you don’t want Dallas to be a great city.”

It’s a hell of a syllogism, and it’s worked for him through the Trinity Toll Road and Convention Center Hotel campaigns, so why not go back to the same well?

So when I told him my concerns, he just shook his head.  “We can’t just throw up our hands and not invest in our city.”   (As if I were proposing to eliminate bond projects altogether and let Dallas devolve into a third-world country.)  I asked him where he thought he was going to get $24 million.  “We’ll find it.”  Are you planning on raising taxes?  “Absolutely not.”

So I guess the mayor is saying, “Spend, baby, spend!  Who cares if we don’t have the money!  We’ll tell everyone that we have to do it, or else Dallas won’t be a world-class city!”  I guess he thinks there are buckets of money we can dip into.  But that would be silly.

City Manager Mary Suhm had the same response.  “We’ll find it.”  Where?  “It’s not that hard to find $24 million.”  Really?  Can you find me $24 million in the upcoming budget so we don’t have to cut our parks, libraries, streets, health services, police, and everything else?  And if we’re so flush with money, why are we planning to take $11 million out of the city’s rainy day fund?

Now, keep in mind, this time last year when we were debating the budget, Mitchell Rasansky and I were the only two people on the council saying the city’s revenue projections were overly optimistic.  We suggested cutting the budget by $40-$50 million or risk making severe cuts mid-year.  But the mayor and the rest of the council ignored us and passed a bloated budget.  Guess what happened mid-year?  The city had to cut services because it had over-estimated revenue by a cool $44 million.

So I’m raising the alarm again.  At a time when we’re cutting deep into city services and scrounging for every penny, it’s irresponsible to dig ourselves into a deeper hole.

With the severe cuts needed to balance our city budget, every department will have to make sacrifices. That includes the budget for the Mayor and City Council offices.  In order to reduce our impact on the budget, we propose the following cuts, which will save nearly half a million dollars in the 2009-10 budget:

BUDGET ITEM	TOTAL SAVINGS
Eliminate paper agendas	$148,000
Reduce Councilmembers’ office budgets by 25%	$57,880
Reduce meals by 30%	$9,600
Eliminate hand-delivery of packets	$6,024
Eliminate hard-copies of interoffice memos (email only)	$5,850
Reduce Councilmembers’ travel budgets by 15%	$8,600
Eliminate two secretarial positions for Council offices	$103,200
Postpone hiring of one Council office assistant for 3 mos.	$17,500
Reduce Mayor’s office budget	$70,000
TOTAL SAVINGS:	$426,654

The memo was signed by myself, and Councilmembers Jerry Allen, Ann Margolin, Linda Koop, Ron Natinsky, Delia Jasso, Carolyn Davis, Steve Salazar, Tennell Atkins, Pauline Medrano, and Dwaine Caraway.

Pittsburgh beat us to the punch, but there’s no need for Dallas to be left out of the tech party. With our city’s budget cuts, anything we can do to make city services run more efficiently is welcome, especially when the City Manager has proposed cutting 311 from 24 hours/day to 7am-7pm daily.

Anyone who sees a code violation can snap a pic, upload, and be done with it, without having to (a) sit on hold with a 311 operator forever or (b) remember all the relevant location/violation info for later input into the 311 website (assuming you don’t forget).

And no more confusion about incorrect addresses (look at picture; compare to reality; done). Plus, the city’s got tangible evidence of an alleged violation and can evaluate the problem before going out to investigate.

I like this on lots of levels and will be asking our City Manager to investigate. But I want a Blackberry version, too.