Here’s the problem that Denver faces: “If the city does not change its current financial structure, the shortfall between revenues and expenditures is projected to average $30 million per year for the next 17 years.”
So says Denver’s Structural Financial Task Force, whose long-awaited report on the city’s budget was released last week and which contains a number of recommendations that are worth pursuing.
That $30 million annual shortfall means that even if the city were to trim that much from the budget next year, it would still have to turn around the following year and cut $30 million more. And even that depressing scenario “assumes that the city’s 2012 budget gap of $100 million was solved using 100 percent permanent reduction proposals,” which isn’t the case. Only about half of those savings were permanent.
Since the city can’t just run a deficit — and for that matter can’t expect to pull one-time savings out of its hat every year — it has no choice but to level with voters and employees about the need for further cuts, streamlining and tax and fee hikes.
The 48-page report is chock full of ideas, so we’ll highlight a few favorites, with the understanding that details remain to be worked out:
• Ask voters for a property tax hike “dedicated to a specific city service” such as “libraries or parks.” Given the many successful examples of library districts, we think the choice is obvious (and that seems a better choice than simply a dedicated mill). Not only has the library commission already done a great deal of spade work preparing for a possible vote, but approval of a separate funding source would save the city $32 million a year.
• Exempt the city property tax from the Taxpayer’s Bill of Rights’ spending limits. This would require a popular vote, too, but since voters have already “de-Bruced” the rest of the city’s tax base, they should be open to adding the property tax.
• “Remove overtime from the calculation of highest three years salary in determining pension payments.” Remove? Why was it ever included?
• Create a self-funded insurance program in an effort to bring the city’s soaring health-care costs — which have averaged 10 percent a year — under control. Health care is one of the big drivers of the structural deficit and while Denver can’t rein costs in on its own, it needs to do better at controlling them than it has.
You’ll notice we haven’t mentioned charging for trash collection — a potentially big-ticket item at $16 million to $26 million. While we accept the logic and fairness of charging single-family units for trash pickup when multi-family dwellings already pay, we’d want to see a specific plan before signing on. We’d also want to know whether the city decides to ask voters for approval, which we think is advisable for such a major change.
Mayor Michael Hancock called the task force’s report “bold,” which under the circumstances is a fair appraisal.
Now the city must be equally bold in implementing it.
