Jonathan Blake

Jonathan Blake is vice president of the Freedom Foundation of Minnesota. In this role, he serves as a policy analyst, research director, and legislative liaison. Prior to joining the Freedom Foundation in 2008, Blake was a public policy and communications consultant for numerous public and private sector clients, primarily focusing on transportation policy, public finance, and intergovernmental coordination. He lives in Woodbury with his family.

Posts about Taxes

Firefighter layoffs expose city's budget flaws

Posted by: Jonathan Blake Updated: August 10, 2011 - 5:53 PM
The City of Minneapolis announced this week that 10 firefighters will be laid off to help close a $23 million hole in the 2011 budget. The move will leave the city with just over 400 firefighters, down from a high of 463 in 2003. So why is the city laying off firefighters more than halfway through the year? Mayor R.T. Rybak’s office blames unanticipated Local Government Aid (LGA) cuts contained in the recently adopted state budget. There are two problems with this explanation: the words “unanticipated” and “cuts”. 
 
Let’s take “cuts” first: The City of Minneapolis received $64 million in LGA from the state last year. This year, that number was “cut”... to $64 million. However, this is significantly less than the city wanted, less than the state’s LGA formula suggested. 
 
Which brings us to the city’s claim that LGA cuts were “unanticipated”: Minneapolis developed its 2011 budget under the assumption that they would receive 100% of their certified LGA, which is determined by a formula. In other words, following a decade in which the state routinely reduced LGA to help balance the budget, following the election of a conservative legislature that made no secret of its desire to rein in LGA, and following (if not in the midst of) the greatest economic crisis of our lifetime, the City of Minneapolis assumed that 100% of local government aid would survive unscathed.
 
What’s the problem with this kind of budgeting? Besides being recklessly unrealistic, it also leaves the city in the position of making disproportionate cuts halfway through the year. That’s because city budgets kick in January 1, but the state’s biennial budget (in a typical budgeting year) takes effect July 1.
 
The mayor himself made this point on his blog earlier this year, saying this about a proposed $40 million LGA reduction: “because the cut would come halfway through our budget year, we’d have to cut $80 million to make up for it.”
 
But instead of taking responsibility for short-sighted budgeting, city leaders are instead placing the blame for their own decisions squarely on the state. A spokesman for Mayor R.T. Rybak said, “when the state passes its fiscal problems and unwillingness or inability to balance its budget sustainably, we have to take action. We can’t pass that onto anyone else.” But of course, the city is passing it along to someone else: firefighters.
 
All of this might be understandable if the city had exhausted all other options first, and if they had budgeted responsibly in recent years. They’ve done neither. For example:
  • Last year, Minneapolis spent more than $1 million on wi-fi services it never used
  • The city paid more than $600,000 for taxpayer-funded lobbyists in St. Paul and Washington, DC
  • And the city’s pension obligations continue to skyrocket, increasing by $17.4 million this year alone
Because of this history, not everyone’s buying the city’s “blame the state” excuse. The president of the firefighter’s union recently questioned the mayor’s priorities, saying “when there’s some fluff program, he finds money for it.”
 
For what it’s worth, Mayor Rybak says he plans to introduce a new “priority-based budgeting approach”. Unfortunately, the question isn’t whether the City of Minneapolis can prioritize services, it’s whether they prioritize the right ones.
      

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