Give Mayor Tom Henry's administration credit for acknowledging a looming budget problem in time to prevent it from becoming an actual emergency.
But not too much credit, because the day of financial reckoning has been coming for a long time – and some local officials here and elsewhere were way ahead of their Fort Wayne counterparts in predicting and responding to revenue shortfalls caused by property tax controls, a weak economy and other factors.
It was big news earlier this month when administration officials warned City Council that the city's cash balance fell from near $27 million in 2010 to less than $20 million at the end of last year and that its 2013 budget may include a deficit of up to $6 million. But the conservative Indiana Policy Review predicted this very thing two years ago, and some governments have already acted in ways Fort Wayne is only now starting to discuss.
In an article in the Review's Winter 2010 issue presciently headlined “At City Hall, there are no more easy answers,” Terre Haute businessman and former Council member Ryan Cummins suggested that, despite elected officials' cries to the contrary, looming budget woes might not be all bad, for at least two very good reasons:
“I happen to think that a situation resulting in taxpayers keeping more of their property is a good thing,” he wrote, especially if it limits “local government to its proper functions – namely, the protection of the life, liberty and property of citizens from force or fraud.”
As Cummins also noted, politicians usually bristle at the prospect of reducing employment or cutting services – which no doubt is why officials in Fort Wayne and nationally are talking about the need to minimize cuts by increasing revenues through taxes, fees or other means.
Allen County officials have not been above advocating or implementing higher taxes, but before the city considers doing likewise it should seriously consider what the county has done to limit spending and to concentrate on government's core responsibilities.
Unlike the city, where the administration prepares the budget for Council's review, County Council has for years taken a far more aggressive role by establishing spending targets for individual departments while giving department heads discretion over how best to meet those goals. Not wanting to tap its $13 million rainy day fund, Council has told departments to cut their 2013 spending requests by about 2.5 percent, and that followed last year's request for across-the-board cuts of 7 percent.
Some of those cuts were later rescinded, just as departments can appeal next year's proposed cuts. But Council's point was made: Budgets will be scrutinized, and spending must be justified.
Similarly, the County Commissioners last year began a process of identifying which services are actually required by law and which could be reduced, eliminated or taken off the tax rolls through new or increased user fees.
That process is ongoing, and County Council President Larry Brown said some departments have cooperated more than others. “We don't want to micromanage, but if (departments) don't cooperate, maybe we will. It may take Council being the bad guy,” he said, noting that City Council -- which unlike the county must deal with unions -- has not always appeared to be as aggressive about controlling costs.
“The point here is not 'We told you so,' Policy Review Editor and former News-Sentinel editorialist Craig Ladwig said about Cummins' two-year-old warning. “The point is we have reached what may be a historical policy juncture and there can be no serious discussion if both sides accede to the fantasy that a $6 million-plus shortfall came upon Fort Wayne suddenly.
“It would seem a reasonable first step toward that serious discussion to assign accountability (as differentiated from blame). Otherwise, (City) Council will feel no political pressure let alone moral obligation to fulfill its oversight duties.”
Taxes are necessary, and most people will gladly pay them in exchange for necessary services efficiently provided. But when taxes are wasted or spent frivolously, the public properly bristles.
The spend-vs.-cut debate will dominate the coming presidential debate, and should. But on a vastly smaller and less overdue scale, it will be just as important here.