June 15, 2009

Let’s set the record straight about the city budget. Contrary to what was reported in the newspapers the City Council did not direct the City Manager to layoff 100 employees. What we did do was to deny the City Manager's request to take $9M from the capitol improvement fund to pay operating expenses. We did this because four months earlier we did allow the City Manager to take $10M from the capitol improvement fund to pay operating expenses. Clearly, if the city constantly has to raid the capitol improvement fund to pay operating expenses (which is like a family selling their stocks to buy groceries) there is a serious mismatch between revenues and expenses that must be addressed.

The City Manager has flexibility to save this $9M in a variety of ways, of which layoffs are one option. Of course, we know that some layoffs may be required, and I wish that were not necessary. But, unfortunately, it is. The car dealers (and the sales tax revenue they generated) that have left town are not coming back. Home values in the entire Phoenix area have plummeted. Tourism is down about 30%. And we have already taken many cost-cutting measures, such as cancelling raises, reducing salaries, freezing hiring and delaying capitol projects.

I have been asked, if the city is short on money why did the City Council turn down some stimulus money? The answer is that the portion of the stimulus money that we turned down would not have saved any jobs because it was restricted to particular uses. In fact, it would have made the budget problem worse by requiring us to hire an additional employee that we would to pay out of the general fund in future years.

I have also been asked why, if we have a budget crisis, did I oppose the closing of Palomino Library? The answer is that the proposal to close Palomino Library was not about money (the budget was being used as a convenient excuse) it was about misplaced priorities in the Library Dept. The issue was not should the Library Dept. cut expenses (the answer is yes) the question was how should those cuts be made.

If we in Scottsdale city government do not cut more expenses now we will soon end up in the same budget crisis as the state government. It is our job on the Council to prevent that from happening, even if that means making hard, unpleasant and unpopular decisions.

As always, feel free to email or call me if you have any questions or need more information.