City Government Spending: Sobering Up The Drunken Sailors

by James Quintero

For years, city halls around the state spent like drunken sailors, acting as if Texas’ economic expansion was without end. And then the crisis came.

Now cities are weathering a deluge of bad budget news, with some expecting the worst.

Houston Mayor Sylvester Turner said recently, “We work on the budget year-round, and we anticipate even the worst scenarios. This one is even worse than anyone had imagined.” His concerns were echoed by one city of Plano official who said: “The pandemic is likely going to affect every revenue source that we have.” These cities aren’t alone either. Others are in the same boat.

With revenues dropping, reserves depleting, and expenses piling up, it’s clear that city governments can’t go back to business as usual. Instead, local elected officials—especially in the large, urban areas—will need to do an about-face and embrace the kind of conservative governance that they’ve long shunned.

Conceptually, that means viewing the role of government through a radically different lens and developing a greater sensitivity toward taxpayers, many of whom are newly unemployed or have lost income. In a more practical sense, it means executing new policies.

For instance, cities need to eliminate programs and positions that aren’t mission-critical. There are many to choose from too, including Austin’s artist-in-residence program, Dallas’ unused “18,000-square foot, state-of-the-art audio and video studio in Fair Park,” Ft. Worth’s diversity director, and Houston’s infamous internship program.

Too, cities should use zero-based budgeting to jettison waste, fraud, and abuse. This technique allows appropriators, operating in concert with department heads, to hit the reset button on their budgets and build anew. By starting over, cities can shed the extra weight they’ve added over the years by using a current services model.

Cities ought to also freeze all new hires. Personnel is typically the biggest expense for any governmental agency and calling a time-out on hiring will help control costs in a major way.

In a similar vein, cities need to embrace auditing. Every city of substance should immediately conduct a third-party independent audit of their budget and operations to identify ways to better stretch their dollars and contain costs. The public deserves that sort of attention to detail and peace of mind.

Another idea: Cities should stop going into debt. New debt generally means new taxes, and most people can’t handle the additional burden right now. Unless it’s mission-critical, the borrowing binges can wait.

Finally, every city ought to adopt a strict spending limit to govern its appetite. A limit based on population and inflation would be particularly helpful. Seeing as everyone’s income is in flux, there is no good reason that city spending should remain unbridled.

Ideas like this must guide city governments going forward. The old tax-and-spend practices of the past won’t work in today’s troubled times—nor can the public afford them. Cities need to adapt.

The good news is that with the correct view of government and the right policies in place, city councils can help spur economic recovery and renewal. As policymakers on the frontlines, they are in the best position to have the biggest impact.

But it’s going to take some sobering up. Times have changed, and so too must city governments. The years ahead are going to be vastly different than the party years of the past.

James Quintero leads the Government for the People campaign at the Texas Public Policy Foundation.