Mayor John Hickenlooper’s budget for the city of Denver next year is in many ways more of the same. More furloughs, more job cuts and more revenue increases.
It is a solid plan to close a $100 million budget gap with as little disruption to city services as possible and without further tapping the pockets of residents burdened by the recession. While the plan is well-conceived, the city’s revenue and spending trends point to the need for a much broader restructuring of how the city does business.
Simply put, the city will not be able to continue to offer the same services with the estimated revenues it will collect in the coming years.
City leaders must figure out how constituents want to balance the books on a longer term basis. Raise revenues? Taxes? Cut services? A combination?
Such discussions assuredly would ignite a political fight, the likes of which Hickenlooper doesn’t want to have as he’s running for governor.
However, budget restructuring is an effort that must be undertaken, and the future mayor of Denver — whether it’s Hickenlooper or a successor — must get serious about that. Hickenlooper’s staff can start laying the groundwork for such a debate now.
On Wednesday, the mayor told the Denver Post’s editorial board that the city has first needed to build trust with residents by repeatedly trimming government. Such an exercise is a necessary precursor to conversations about raising revenues. But the problem is that as soon as you start talking about, for instance, closing down recreation centers with the lowest usage rates, you mobilize a constituency, which is understandable.
“That’s where the fur flies,” Hickenlooper told us.
However, the way the budget is being balanced this year is not sustainable, and Hickenlooper and his team acknowledge that. For instance, using one-time money, such as tapping reserves, can’t happen every year.
This is the third year in a row in which the city has had to strategically cut the budget to make ends meet. During that three years, the city had to close a cumulative $346 million in budget shortfalls.
The recession has hit Denver and local governments hard. We don’t believe the situation will remain so bleak forever, but long-term projections show that sales-tax revenues, which make up 50 percent of city revenues, won’t be as robust as in the past.
When the economy comes back to life and businesses start hiring again, the city and other governments must not ease up on their budget-cutting ways. They must rebuild reserves and make sure they do the hard work to have a lean government that is in keeping with the kind of tax revenues citizens are willing to part with.
Those are difficult choices to make, and not nearly as satisfying as cutting the ribbon on a new public building or announcing a new government program.
The next mayor needs to makes budget restructuring a top priority. A responsible government should take its financial prospects into account to properly plan for the future.
