Budget time for local government

November 28th, 2016 by Ken

This week, local cities, counties and special purpose districts will approve their budgets for the coming year.   All of them have held public hearings on the budget and all of them will hold one final meeting in the next couple of weeks to approve their respective budgets.

While the budgets vary in size and in scope, they all have one thing in common.   They all have more money than last year, particularly those that depend on sales tax revenue.   It’s been a good year for sales and revenue is up over 2016 in most areas.

But, they all have something else in common.   All that money has been spent on salary increases for employees, as well as increased costs for medical benefits.

It happens every year.   Government gets more money and that money is immediately eaten up for salaries and benefits.   That’s because all government agencies negotiate with unions for those increases, and over the years those increases have become natural and normal.   Step increases for employees as they gain more experience and stay on the job longer are just one example.   Cost of living increases, to keep up with inflation are also the norm.   Even though inflation has been almost non-existent for several years, those cost of living increases run anywhere from two to six percent.

Increases in medical costs are also passed on to taxpayers.  It’s seldom that government asks its employees to pick up more of the cost of those premiums.

So, don’t expect reductions in taxes or increased government programs, because salaries, benefits and medical costs eat up most of the increased revenue of local governments.


Posted in Government, The Real News

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