2 Minutes for the Commission: The Budget Crisis Here and Now

Mr. Mayor, Commissioners and City Manager:

I stand in strong opposition to new taxes and new fees on Coral Gables citizens and businesses.

It is unfortunate that the City has reached this point of no return. While the much anticipated economic slump and accompanying real estate and financial collapse no doubt helped trigger the City’s crisis, the recession and real estate collapse themselves are not the reason for the City’s crisis. The abortive use of elementary financial management, and the pervasive misjudgments and negligible foresight of budget risks by the Commission and Management during a period of extraordinary growth and once-in-a-lifetime real estate bubble, has led to this crisis–not the national economic recession. The City’s crisis would have happened sooner or later–sooner with the economic recession and later with a return to normal growth in the economy and historical property values.

The City Government has been living beyond its means for years, approving outlandish benefits and salaries for its management and employees, overspending on capital projects, including the beautiful new Museum, and sidestepping its fiduciary responsibility for the Hotel Biltmore and the Coral Gables Country Club.

Where do we go now–the City Government has no reserves, it can’t finance its new projects, it can’t meet its pension liabilities and salary obligations without reducing staff and salaries. The new budget calls for some salary and staff reductions, but this is not real austerity, because it requires more taxes and new fees. Any budget that increases taxes and imposes new taxes (some called fees by our government word masters) can only be seen as being wholly indifferent to the welfare of our citizens who are suffering through the world’s greatest economic recession since the 1930’s.

There a concern in the Commission that unless we have more taxes and new fees we will have a “cut rate government”. This is similar to the recurring theme that we will lose our “quality of life”. But now we have a Cadillac/Mercedes Benz grade government and what we need is a good solid, economical Honda/Toyota/Ford caliber government that will satisfy our needs and suffice for our families for the next few years.

What are our families doing during this economic slump. We are drastically cutting our spending, making personal and family sacrifices and very carefully husbanding our remaining resources.

The City must do the same as our families–it must cut back right now on staff, salaries and pensions and other spending. This can only be done by cutting a significant number of government employees. It can be done by freezing spending and suspending all capital projects for two, three or four years. The citizens of Coral Gables can’t tolerate any more taxes and fees, and it is time for the Commissioners to stand up and face the financial reality of its citizens and businesses. To be sure, under present circumstances the City in fact should be reducing taxes in compensation for the many years of over spending and over taxing. By only calling for a freeze of the current millage rates, citizens are indeed more than acquiescing in support of the City.

Hence talk of falling “quality of life” and a “cut rate government” are meaningless slogans without a clear understanding from Commissioners of what they consider truthfully are the essential city services. Let us hear the Commission list the necessary services; this could lead to a very productive debate.

The City Government cannot be indifferent to the financial problems of its citizens and taxpayers. As a taxpayer, I call for true government sacrifice, austerity and responsibility during the coming years.

We hope and trust that the Commission will come to its financial senses and that it will take significant and lasting decisions against fees and taxes.

Thank you for your attention,

Stephen McGaughey

About Stephen E. McGaughey
International consultant in financing development programs and projects

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