Time for a Balanced Budget Amendment
Almost 500 years ago John Knox stated that:
“You cannot antagonize and influence at the same time.”
That is great advice for each of us to apply and follow as we work to bring about common sense solutions in Lehigh County government.
First, let me say that I believe we all want the same things from Lehigh County government.
- We want to be safe so we need a well-supported DA, Courts and a prison to keep criminals off the street
- We want a state of the art 9-1-1 system that we can quickly contact in an emergency
- We want the bridges that we drive over with our families to be structurally sound
- We want well maintained and accessible parks and ball fields for our kids and grand-kids
- We want a quality nursing home for those seniors who need it and we want to be able to care for those children or disadvantaged individuals who cannot care for themselves.
And I also believe everyone wants to do all this as well as the other things that the County must do in fashion that is fiscally responsible.
Over the past dozen years, Lehigh County has had two tax increases. In each instance, the tax increase was the result of several preceding years of budgets with deficits, and where the deficits were covered by drawing down the County’s reserves. At the start of last year’s budget hearing, one of the Lehigh County Commissioners referred to the practice of passing budgets with an underlying deficit as insidious; because he knew the ultimate end result. That is, once the decision is made to go down the path of using reserve funds to balance the budget, another tax increase is all but certain once those reserve funds near depletion. Based on my experience on the Board of Commissioners no one – Republican or Democrat, past or present – wants to or “supports” raising taxes. But sometimes that is the least of a number of bad options.
What happened in Northampton County just last year is a prime example of this dynamic where their County Council, with a Republican majority led by a group of conservatives, proposed and passed a tax increase to make sure Northampton County was financially sound and could fulfill its responsibilities. They did what they thought was necessary.
Turning back to Lehigh County and the issue at hand, another one of the Commissioners recently expressed a desire to investigate the “root cause of budget deficits”. Respectfully, the answer is fairly simple: Budget deficits are caused by elected officials approving budgets that put in place a plan for the government to spend more than it takes in.
Unfortunately, that has continued to be the case in Lehigh County. In spite of having a veto proof 7-2 Republican majority since 2012 (and that hand-picked two interim County Executives), the actual result is that none of the budgets passed since then, including the one for 2015, have been balanced. There will be some who will say as they did for the 2015 budget; “close enough for government work; we’re only out of balance by $3 million; we always do better than budget”.
And in Lehigh County that last part has been the case. When the Administration reported that it has done better than budget for 2014 that was absolutely a good thing. However, there have been years – 2011 comes to mind – where doing better than budget has been portrayed as a bad thing. And there have been other years – 2013 for example – where the budget called for Lehigh County to spend $6 million more than it took in and guess what? Lehigh County did exactly as the Commissioners planned and had the result of a real cash deficit of $6 million for that year. Regardless of the politics, planning to spend more than you take in is not sound fiscal policy. It simply is not.
Families don’t budget that way – at least if they want to stay out of bankruptcy, businesses don’t budget that way – at least not successful ones – and Lehigh County shouldn’t budget that way. Otherwise we are no better fiscal stewards than those in Washington.
And speaking of the federal government, Lehigh County has taken another page out of the Washington playbook by passing so-called tax cuts that result from taking money out of one government pot and shifting it to another without first balancing the budget by making real and recurring reductions in spending.
Let me emphasize that:
Returning a few dollars to tax payers and calling it a “tax cut” while planning to spend more than you take in and raiding the county reserves or counting on the County Executive to do better than planned in order to balance the budget is NOT conservative fiscal policy.
As I stated at the beginning, it is not my intent to antagonize. Many talented and hard-working citizens – on both sides of the aisle – have served on the Board of Commissioners and also failed to deliver a balanced budget even though they knew that was and is the key result needed to serve as the linchpin for avoiding future tax increases.
Thus my conclusion is that there needs to be a change to the current system in order to to produce the result of balancing the County’s budget without using reserves. Section 704(a) of the Home Rule Charter calls for the budget to be balanced and it allows this “balancing” to be accomplished by using “the total of estimated income AND cash reserves”.
What is needed is a “Balanced Budget Amendment” to the Home Rule Charter prohibiting the use of cash reserves as a means to balance the budget. The amendment would include an exception allowing for the use of reserves in emergencies or to give a credit to taxpayers providing the underlying budget is still balanced. Those exceptions would require an affirmative vote of 6 Commissioners. Having a budget that is truly balanced is the key result needed to avoiding the types of tax increases we have seen in Lehigh County and most recently in Northampton County.
A Balanced Budget Amendment to the Home Rule Charter will accomplish that and allow the Board of Commissioners to focus on developing and implementing real spending reforms, and abandon the fiscal shell game that has been played for too long.
With that I’d like to close with another quote, this time from President Ronald Reagan:
“There is no limit to the amount of good you can do if you don’t care who gets the credit”