Our past good times are killing us.
Last week, Mayor Greg Nickels held his first press conference. The topic was the sorry state of city revenues—and the first words out of the new mayor’s mouth were: “I’ve inherited this problem” (which probably constitutes his first excuse). But the sobering facts that followed made it clear that, after four years of seeing Mayor Paul Schell breaking ground for project after city-funded project, Nickels is going to spend most of his time trying to dig out of a big budget hole.
And the new mayor isn’t just blame throwing when it comes to pointing fingers at the previous administration. One of the problems with good economic times is that city leaders get used to regular revenue increases as a matter of course. Finance Director Dwight Dively presented a chart showing that the city’s sales-tax revenue grew every quarter (as compared to the same quarter of the previous year) from 1995 through the third quarter of 2000. Since then, things have generally been on the decline.
So while the Schell administration will be remembered for the many libraries and community centers under construction on its watch, the Nickels administration will be charged with finding funds to staff and operate them. Next year, the city will pick up $2 million in new operating costs, with as much as $5 million in new costs being added in 2004. The city also took on a lot of debt during the boom, and the interest payments on some of it come right out of the general fund.
Nickels added that while in December the City Council made last-minute trims to balance this year’s budget, they are one-time savings—and those cuts won’t help next year when the city must chop another $30 million from this year’s spending levels. Plus he wants to create a contingency fund by making further cuts this year (where he won’t say, beyond pledging to protect the fire and police budgets).
Unfortunately, nobody thought to ask him if he remembered why he wanted this job so much.