Local governments should be acting now for coming shortfall

Pratt on Texas - copyright Pratt on Texas all rights reservedWhile some of you small business people and employers are dealing with possible bankruptcy down this road we are on, don’t feel too secure in how Texas at least lets you keep your paid-for homestead. Why? By not significantly cutting expenses now,  local government officials will be forced to raise property taxes and price you out of your house too.

The Texas Tribune spoke to numerous city officials across Texas who talked about the massive blow to sales tax revenue, which can be up to a third of municipal revenue, loss from airport, convention and meetings revenue, and the massive downturn in the oil industry. However, there was no mention of how many commercial and residential property tax payers who, when out of work or out of business, may not be able to pay those taxes causing big revenue drop from the source public officials wrongly think of as stable.

So what are these professional budget masters doing to mitigate the financial disaster in revenue drop-off we do not simply expect but know is coming?

“Some cities have already stopped their nonessential hiring processes, travel and training activities,” the Tribune story reported and that’s about all.

That might be all you did if you operated under the idea that you can simply call up your customers and demand, with the power of law, that they hand over more of their precious resources to you to make up for the coming short fall. That’s how government acts but they may find it difficult if we are in deep recession or even depression.

That’s why I have said to local officials, we will know this is a real emergency where everyone should do his part, when immediate, temporary significant wage and benefit reductions are put in place for all government employees. Better this than layoffs and the common tactic of deferred maintenance to make budgets balance in coming months.


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