By putting off incremental budget cuts as long as possible,
Hollister officials are preparing to run dangerously close to the
cliff.
By putting off incremental budget cuts as long as possible, Hollister officials are preparing to run dangerously close to the cliff.
That inevitable drop-off keeps getting closer with the continuing recession and at least a year lag time between a potential economic turnaround – whenever that might occur – and when such a reversal would have any positive impact on city coffers.
Officials know their time is running short. City Manager Clint Quilter broke down the projections in a meeting with the Free Lance Editorial Board and noted how Hollister leaders in the next six months, despite no such talks to this point, plan to start discussions on strategies to prospectively reduce compensation costs.
That might be too far down the line for comfort considering the fragility of the local and national economy, and it is not worth taking the chance. City officials should have started making incremental adjustments months ago and should immediately examine what types of relatively smaller cost-cutting measures make sense in the short term before the strength or weakness of all the revenue numbers show face.
There are less than four years remaining until the Measure T sales tax increase, approved by voters in late 2007, is set to expire. This last fiscal year, Hollister used the majority of the projected Measure T revenue, $2.1 million, to pay down the deficit. The way the economy is going, that cold reality likely will be the case next fiscal year, too.
On this path, with this economy and with slowly-churning development prospects, it is getting more and more inconceivable that the city will have the financial capability to void the 1 percent tax increase without making drastic cuts when it expires. Knowing that, city leaders can either start adjusting their spending habits now or else they can simply count on pleading with voters again in 2013 to make the tax hike permanent or extend it.
They should gladly accept Option 1 for a couple of reasons. For one, it is financially irresponsible in such times to sit back and hope for the best. Proactive leadership, and accounting, is needed to prevent another fiscal meltdown. Secondly, it’s the best move politically as well. Voters are looking for proactive leadership and prudence with their money. In the current mood at least, they also are highly unlikely to approve any Measure T extension at the polls, especially if council members fail to show the foresight every other local government has been attempting to show since the economy completely tanked last year.
Hollister leaders must start taking budget-reduction steps now before it is too late, before they can only react.
