I attended the March 2 Citizen Think Tank as an observer. Another session is set for March 9, 6 pm, in the Public Works Facility, Assembly Room, 900 East Juniper Avenue. This group of citizens, hand-picked by the Council members and Mayor Lewis will make recommendations for how to resolve the $6 million budget deficit for FY 2011-2012, and how to achieve financial sustainability for the next 5 years.
How does the Town government find a way to “sustain” itself over the next 5 years? Why, it’s easy: A Primary Property Tax. And, if you take a look at page 26 of the Strategic Plan (http://www.gilbertaz.gov/efficiency/pdf/2011-16StrategicPlan.pdf), there are plans to “educate the Council and citizens on the Use Tax as a potential additional revenue opportunity.”
At the 3/2 meeting of Citizens, Dawn Irvine, new budget administrator, didn’t state the need for a Primary Property tax. She didn’t have to. She laid out a very complex budget as simply as possible and identified current sources of revenue. If you had tallied the number of times "Primary Property Tax" was said outright or implied, you would know that the purpose of this Citizens Think Tank is to educate Gilbert’s citizens to come to that conclusion all by themselves. Thus, the Council will be “forced” by the citizens to tax them.
A Primary Property Tax is both cruel and devastating. You can work your entire life to pay off your mortgage, but never really own it, because you still have to pay taxes on it. People have been forced out of their homes, because they cannot pay the taxes.
In the 3/9 meeting, I’m hopeful that the 10 conservative citizens, outnumbered by 25 spenders, will consider the following:
“What would the president of a private company employing 1200 employees do if faced with a short-term $6 million budget deficit, and an ongoing deficit for at least the next 5 years?”
Eddie Cook, Victor Petersen, Jordan Ray, the 2009 Citizens Budget Committee, and the Town’s own employees have provided answers to that question. The majority Council (Linda Abbott, Dave Crozier, Les Presmyk, and John Sentz) disregarded many of them. That’s how we got Prop 406. Fortunately, Gilbert’s voters defeated it. But the forces of tax and spend "for the general welfare of the community" never end.
A private corporation’s president would not solve a large deficit by raising prices. He’d be driven out of business by his competition. In fact, he even might consider lowering prices. His margin would be smaller, but his volume might increase. It happens all the time in the free market.
He would eliminate and/or reduce expenses, studying every cost line by line: 1) Is it necessary? 2) Is it necessary right now? 3) Can I get the materials/service cheaper somewhere else? This is not a one-time event, but an ongoing process, aided by his organization’s best resource: Employees.
He would look at processes within his organization. Are they necessary? Are they being done by the least expensive method? Are they being duplicated? Is the wheel being reinvented? His greatest expense, but also his greatest resource, is his employees.
Jeff Niland, who served on the 2009 Citizens Budget Committee, offered his professional services free of charge for one year to help the Town. Jeff had helped turn around many organizations over his long career, instituting organizational efficiency processes. Victor Petersen has recommended using similar processes: TPM (Total Productive Maintenance). It’s a bottom up process in which employees learn to continually look at everything they do, and make suggestions to correct inefficiencies.
San Diego County borrowed from private industry and instituted a similar process with spectacular results. (They later got themselves in trouble by expanding entitlement programs, but the process itself is the gold standard.)
The majority of the Council members weren’t interested. The Town continues to lag 15 years behind the state of the art in efficiencies.
The private sector president would also hold his employees accountable for their performance. He would ensure that they have both the responsibility as well as the authority to achieve the goals expected of them. If the director of a department couldn’t meet the performance standard, he would be replaced by someone who could.
If an organization never holds its employees accountable, then where is the incentive to perform to a standard? Reward good performance. Eliminate poor performance.
The beauty of the free market is that it forces you be more efficient, more effective, and thus more successful than your competition. If you don’t do it, you don’t survive.
Hopefully, the members of the Citizen Think Tank can think beyond more taxes as the solution to the Town’s deficit.