Putting up hurricane shutters on the county budget ... by gimleteye

The stock markets are rallying hopefully on signs of the economy bottoming out. But as the Wall Street Journal notes, stronger earnings than expected "is less a sign of an improving economy than of how deeply businesses have cut costs in response to the downturn." These cuts have dramatically reduced workforce employment and lead to the continuing crisis in consumer confidence. Wage earners are saving money and putting out anchors to keep from being swept away by the worst economy since the Great Depression. The grim reality is that American households have lost "about $14 trillion in wealth, more than their collective earnings from all sources of income last year." ('Obama Aides see signs of recovery, but say it will be slow;, August 3, 2009, New York Times)

The proposed county budget for 2009-2010 is an effort to close a $400 million shortfall ... (please click, 'read more')
between revenues and projected expenses. The areas taking it hardest on the chin: social and cultural expenditures peripheral to core services like public safety. In Miami-Dade, Florida's most populous county, "Final property tax roll growth for calendar years 2004, 2005, 2006, and 2007 showed extraordinary increases of 13.4 percent, 18.7 percent, 21.4 percent and 15.4 percent respectively. For 2008, final tax roll estimates for the Countywide is minus 0.09 percent when adjusted by the impact of the January 29, 2008 constitutional amendments. For FY 2009-10 the estimated tax roll adjustment at a Countywide level is an unprecedented 9.5 percent loss. For FY 2010-11, the property tax roll adjustment is assumed at 12 percent loss, flat for FY 2011-12, and 3 percent growth thereafter. This conservative tax roll forecast is the result of current real estate market conditions." (Proposed County Budget, Page 98)

While there may be a lot of wishful thinking built into these assumptions, it is hard to fault Mayor Carlos Alvarez and County Manager George Burgess for delivering the bad news: don't shoot the messenger. The size of government either has to be reduced, services cut and curtailed, or citizens have to support county commissioners who approve new taxes. Balancing revenue to service even the reduced, proposed and painful county budget will require higher taxes.

The proposed County Budget is dismal, but the news is yet worse: there are some $20 billion in unfunded infrastructure deficits: a fact that mocks claims by developers and the Growth Machine that the rabid, speculative fever during the housing boom benefited taxpayers. We now get to see the true nature of their Ponzi schemes.

Growth does not pay its own way: what lead to this point in time is nothing less than disaster capitalism in practice. I predict a severe backlash against the unreformable majority of the county commission for 2010 elections. But that too may be wishful thinking: all around us perpetrators of economic fraud are being rewarded. None are being held accountable. The speculators with bad investments outside the Urban Development Boundary are being kept afloat by banks no longer required to "mark to market" investments of dubious value on their balance sheets. The absence of transparency also leads to despair and consumer anxiety. As frequently noted on Eyeonmiami, voters and taxpayers are stuck with a campaign finance and electoral system that is "representative" democracy in name only. Every effort at reform of the county commission has failed, anchoring the parochial interests of an economic elite that will ride out this hurricane on platforms of wealth built during the boom times.

The heavy lifting on the county budget is being lead by Commissioner Katy Sorenson who begins a series of budget workshops on August 24. The first public hearing on the ordinance enabling the new budget will be on Sept. 3rd. At that meeting the county commission will vote on the preliminary budget and tax rate. September 17th is the final vote and trumps whatever they do on Sept 3rd., but according to state law the first meeting is the critical one for the tax rate.