The city of Miami has a $60-million hole in its budget and has declared a state of “financial urgency” in order to fill about two-thirds of it, but how many times can city leaders declare an emergency?
It’s time for city leaders — both elected and administrative — to ask whether the solution to this latest shortfall is only digging the city deeper into unsustainability. When commissioners unequivocally take tax increases off the table — even decreasing the tax rate as the city’s property-tax picture brightens — they hamstring efforts to put the city on more-solid financial ground.
Financial urgency is a neat little maneuver, allowed by state law, that lets cities force concessions from their employees in order to balance the books. In Miami, that means that the city can either resuscitate comatose negotiations with its employees’ unions or get what it needs without them.
The unions — firefighters, police, sanitation and general employees — of course call this tactic an abuse of the law. City administration says the financial urgency designation is necessary because the unions aren’t budging.
Clearly, something’s got to give, and in this case, it’s everyone.
This is the city’s third financial urgency in as many years. The first time, administrators had a $116 million hole to plug, and commissioners imposed pay cuts, eliminated perks and scaled back pension benefits. Last year, the city and unions came to a meeting of the minds to help fill a $61 million shortfall. This year, the city plans to cut 27 vacant positions, renegotiate information technology contracts and curtail spending citywide to save about $20 million.
Employee pensions will cost millions more this year, as they do every year. The reality is that pensions are becoming unsustainable to keep up without concessions now, and with more reasonable terms in future contracts. The city’s long-term battle with its budget, especially in this slowly recovering economy, should force disgruntled unions into the real world, where the rest of working Miamians have faced layoffs and cutbacks in their own lives, too — and made adjustments to cope.
City officials are suggesting an array of concessions including having police officers continue paying a per-mile fee for their take-home cars; having the fire department keep overtime spending flat; and having firefighters and solid-waste employees pay higher co-pays on their health insurance.
That said, union leaders are right to ask if the city is doing all it can to raise revenue. Cut, cut, cut has been the city’s default position. But there’s little indication that it’s thinking outside of the box — or has the temerity to take politics out of the equation. Miami-Dade County, for instance, took $25 million from its own water and sewer department, declared it a loan and has a plan to pay it back.
The city, too, must look at where it is needlessly subsidizing services and, yes, ask residents to come up with a little more. At $380 a year, does the fee for trash pickup and recycling cover the actual cost the way it does in other South Florida cities that charge more?
Even the good news in this whole situation managed to be subverted. With rising property values, the city saw a $3.3 million increase.
But instead of, at the very least, maintaining the overall tax rate, commissioners last week reduced it, saving homeowners a little morethan three bucks on average a year — and giving commissioners bragging rights to having lowered taxes come reelection time.
That’s not how to put the city on more-solid financial footing.