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Excused From the Table

Three years ago I had the opportunity to keynote the national EPA Conference on Water System Sustainability, held in Atlanta.  During the conference, I met with members of the Congressional Budget Office (CBO) who made it clear that the federal government could no longer fund local water systems at previous levels. Even more disheartening, CBO staffers noted that many programs related to water, wastewater, health, recreation, and community development that had enjoyed historically strong support would see reduced funding. I was encouraged to share this news with local officials during my travels and work with cities and counties. When I suggested that this was the role of professionals in D.C., I was told that it was not politically expedient to share such bad news and that the CBO and other Washington agencies had been told to avoid any public announcement.

For those who subscribe to Bloomberg News, you may have seen the February 28 article reporting that Stockton, California has filed for bankruptcy. The article reported that Governor Brown refused to discuss the situation, which in many ways signals the current fiscal environment, but also the growing schism between federal, state and local government. While some states are seeing some revenue growth due to a broad (but weak) US economic recovery, aid to cities and counties continues to decline. In a very real sense, it is ‘every man for himself.’ There is some humor here, in that this phrase can be partially attributed to the 1924 Our Gang short film of the same title, in which the Gang generates revenue through a combination athletic club and shoe shine emporium. The ensuing high jinks resemble many contemporary economic development ploys, most of which fail to embrace reality.

As stark illustrations of actions taken to avoid bankruptcy, Pontiac, MI has eliminated its police force and Cleveland, OH has demolished thousands of already condemned structures in a effort to sustain or improve property values. Unfortunately, for every reported action taken by local government, there are hundreds of critical actions taken to reduce costs while preserving historic values and service levels. As noted many times in this Blog, there is a major re-centering occurring in America. For close to 60 years, money has flowed freely, and was particularly apparent during the early days of New Federalism, during which block grants flourished.

The latest incarnation of New Federalism is the largely unannounced policy to reduce funding to the locals until they are forced to either forego or reduce service, or find new revenue sources. Whether by increasing taxes, private-public partnerships, new enterprise mechanisms, or bake sales, local government is now facing a major shift in operating philosophy, described in my book, Planning the Future. That is, communities must decide what is essential and what should be eliminated, reduced, maintained or expanded. Demand is NOT declining, so the prospect of conflict is high as expectations grow for both service expansion and reduction. Within five years, even if local government expands to meet demand, this trend will fully bloom into more frugal government, better strategic planning, and highly accountable public operations.

The number of communities that are tamping down budgets is enormous. Not to say I am an advocate of reducing services while demand for those services is expanding, but I do believe in careful planning that attends to programs and services that serve the greatest common good. The key is to get ahead of the curve and begin the process now, before community fabric is so frayed that recovery is difficult. Through proper planning, public leaders can recognize critical issues, evaluate impact, establish goals, then identify strategies that allow remediation and define new options. Now is not the time to blame state and federal government but to recognize universal trends that affect all communities. This is a new era. Most communities are facing local realities that are forcing them to confront conditions that seem too harsh or punitive. This new era is neither temporary nor nebulous. And, it is not punitive. It is the new norm…at least for quite some time.

Consolidation, collaboration, and contraction require careful planning. What is happening locally? Are grand plans being made that cannot possibly be funded long-term? Are strategic plans grounded on carefully articulated issues and are the impacts of those issues clearly stated?  Are there clear discussion points and decision points? Have a series of If-Then scenarios been developed by local stakeholders and government leaders? Do you know what’s at stake for every decision? Time will tell…

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal government long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His 2010 book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders, is being hailed as the best book for public managers and community leaders who are committed to building a sustainable future.  An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at http://www.futurescorp.com).

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