When you see the headlines that the City of Duluth is laying off 200+ workers because of budget concerns you gasp. But you really need to look a little bit farther into the problem as of course the first thing you will hear is the State did not give them more money.

So let’s put it into perspective for you as I am sure the media will not. Last year the city raised the levy by $1.33 million to $13.5 million – 10.75% over the 2007 levy. The Duluth 2008 City Budget was almost $81 million. Duluth received almost $29.1 million in local government aid. This is an increase of $8 million from the $21.1 million received in 2001 or a 37.9% increase. To put that in perspective, Duluth would have received that much alone in just one year from 2001 to 2002 had LGA not come under the scrutiny it deserved.

If you read the budget documents on the City of Duluth’s website you would get the feeling that the entire budget mess they have gotten themselves into is the State of Minnesota’s, because of Governor Pawlenty’s Veto of the Tax bill last year, and because of LGA cuts back at the beginning of the decade. http://www.duluthmn.gov/finance/2008%20Revised%20Web%20Budget.pdf

Duluth has a stagnant or declining population, a political machine that caters to unions, a culture of relying on others to finance its pet projects – all which creates a perceived or real anti-business environment. What’s more – citizen groups that rise to oppose almost any form of development, at least if it's in their neighborhood NIMBY-ism at its finest. A building inspection department which seems to revel in telling people 101 reasons why they can't build their project. Why would you expect any different outcome?

The city of Duluth has inherited its budget mess. Politicians from years past have simply passed along the same old “different day” thinking to the next generation of elected officials who have done the same old thing. Einstein was correct: you cannot solve a problem with the same old thinking that got you there in the first place. To solve the problem we must think and act differently.

But don’t think anything will change. First, we will see the headlines, then as has already occurred reorganization and in the end will anything change? Maybe it is time to look at a regional government, or at competitive bidding for public works within Duluth. Perhaps it is time to overhaul the retiree health care debacle. It is time to truly review the expenses - current and upcoming - and make necessary adjustments – not just cast the blame on others and expect other taxpayers in Minnesota to bail Duluth out. The new mayor Don Ness was part of the Council situation that created this mess to begin with so it is not likely to be solved by the current administration either.

Mr. Ness, in an e- mail written to a concerned citizen dated 2-15-05, outlining his thoughts on LGA, wrote that:

“LGA is a property tax relief program it (sic) is designed to help communities like Duluth keep our property taxes low and competitive. It also allows each community to provide a basic level of services for a reasonable amount of property taxes on local residents.”

Mr. Ness concludes:
“We are all residents of Minnesota whether we live in Edina or Duluth. Edina has many advantages over Duluth in terms of tax base and need for services. Resident (sic) of Edina have huge advantages in paying for local services for this reason. I wish that all MN communities could be like Edina and Eden Prairie – but we cannot. LGA is designed so that we do not punish resident (sic) of our state for living in a high-need, lower tax base community in order to pay for basic needs.”

I suspect it will be like St. Paul and calls for cuts to police and fire to tug on things that are really essential services as an excuse to drive the levy hirer and to push for the DFL in St. Paul at the Legislature to hand them over more of other taxpayers money to address not what is a recent phenomenon but years of uncontrolled spending further complicated by spending that is not accountable through LGA and other government handout programs.

Cutting services or increasing taxes is easy - for awhile – just blame the other guy. But because of lack of fiscal discipline and redefining priorities budgeting goes unnoticed until your checkbook is being drained further. Cities, counties and states must find new ways than to simply spend, spend, spend! For example, Duluth funds retirees' health care. This is honorable, indeed but is almost impractical. Duluth needs to look and make hard decisions and this is one of them. Does the current structure take advantage of other benefits available such as Medicare, or other measures that might sharply reduce Duluth’s costs? Surely, if Duluth asks retirees to use Medicare as their primary source and then provide a supplemental plan to reimburse uncovered expenses, both the retirees and the taxpayers win. Duluth must look at everything to see if they can find similar efficiencies.

Eliminate overtime – According to Duluth’s budget office from January–June overtime totaled $1.118 million.

In a July 24th Wall Street Journal Article, 'States Slammed by Tax Shortfalls' reported - “In Minnesota, the city of Duluth plans to stop operating its Fun Wagon—a free trailer stuffed with games and cookout supplies for a neighborhood party.” Gee - what a tragic loss for the city?

Simply put - Duluth’s problems are not because of the state. Those in Duluth know the about the $300 million unfunded retiree healthcare debt, $30 million for abuse of overtime over the last decade, $22 million and counting for a failed parking ramp, and more than $16 million for an aquarium.

Reinventing itself, creating a family and tax friendly climate and new businesses is a must, not a steady diet of tax and spend, like the past several decades.

Welcome to 40 years of DFL control. No way to blame this on anyone else. Don spent 8 years on the council voting to spend money on every special interest group that came in. Never had to worry about it, it wasn't real money, it was city money and when that ran out cities like Duluth run down to St. Paul, where the adults are, and hold out their hand and ask for more! Now the city employees are once again made out to be the villians in this story. Mayor Don makes 80, plus maxxed out deferred comp and $400 a month for a set of wheels. Let’s start at the top and not the bottom first - what are you giving up to solve this crisis Mayor Don?

Duluth needs to fix its budget shortfall from a public policy perspective. In other words, if Duluth does not structurally fix the budget they will end up having this politically charged discussion during every budget cycle. This will take real political will on the part of the elected officials in Duluth. Once this happens, expect things to change. If it does not happen, we can expect more of the same. Keep in mind you can substitute any city in this argument from Lonsdale, to Minneapolis, to Brainerd, to Red Wing – the arguments and the issues are the same.

If the Duluth City Council can lay blame on their own budget dilemma on the State, or better yet the governor, they can transfer attention away from efforts of designing efficient government in the City of Duluth. There are inefficiencies and fiscal problems in Duluth (as there are in other cities) but Duluth’s leadership would rather blame the governor and legislature. Better to blame someone else than make hard decisions, or to have to look our own sacred cows right in the face.

It’s a bit ironic that some councilors, when it comes to economic development (like attracting employers and employees), opine about appearances of corporate welfare, or taxpayer giveaways. Yet, when it comes to LGA, they have their pockets wide open to accept state subsidies to help pay for their own city’s services, essential and non-essential. Aren’t we, in essence, accepting taxpayer giveaways from somebody in another part of the state when we accept LGA to pay for our own services? Could you perhaps liken LGA to a form of state welfare, paid for by non- local taxpayers to fund Duluth services? These cuts in LGA are forcing city governments to become more accountable, to be fiscally responsible, to discover ways of finding governmental efficiencies, to focus on the funding of “essential” city services and to become more proactive in improving local tax bases. Isn’t that why we elected our leaders in the first place

Let’s face it; we have to run local government’s finances as we do our households. If at home we have a budget shortfall we can't go and confiscate it from the neighbors, we either have to get another job or cut the expenses. The same has to hold true for a city, township, county, school district and the state. You will almost inevitable hear the threats of cuts will be made in police and fire. Why not be honest and do cuts through a freeze on hiring, cut jobs that are duplicated in the city or county or other government organization. Try farming out some of the tasks if it would be less expensive. There are a lot of creative ways of saving money. But that is not how politicians get elected – they get elected on promising to deliver. It is time to get back to core essential services and limited other services!