Citys Citizen Budget Group Time To Privatize

April 10, 2006
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Grand Rapids City Manager Kurt Kimball assembled an astute citizens group and enlisted its assistance in outlining the next fiscal year budget, one anticipated to be the most difficult in recent history because of its $8.9 million deficit, due in large part to cuts in state revenue sharing. Kimball said he was impressed with the group's understanding of municipal finances, adding it "did the city a great service by pointing to some of the structural things that need to change."

As has been redundantly noted in this column, the group made a point of the city's wage and benefit structure, suggesting that it more closely mirror that of its constituents. Employers here and across the country have adjusted health care benefits and employee contributions for those benefits for nearly a decade, as year-after-year consecutive increases drained profitability of U.S. companies. Delphi court testimony and the pleas of General Motors are unfortunate examples of the necessity of such cuts.

Kimball also said that while the group did not necessarily have unanimous opinions on what and where to cut, he appreciated that the group was united in the strategy for such cuts.

The group also advocated for privatization of some city services, such as economic development. While the city manager regards the comparatively infinitesimal budget of the economic development team, the "strategy" is that of privatizing — and the $143,000 expenditure for the economic development team is as good a start as any, especially considering the strength, research and expertise of The Right Place Inc., which at one time provided the service for the city. City commissioners obviously lack in this area of expertise, and staff recommendations become more a political football than good, unbiased strategy. Using The Right Place creates far greater opportunities for the city.

Mayor George Heartwell told the Business Journal editorial board in February that "privatization is not a dirty word," and he should lead the discussion of what services the city could return to the private sector. Like benefit cost sharing, it is less a choice and more a necessity, especially given the looming double-digit deficit the city faces over the next five years. Grand Rapids Public Schools took advantage of private sector services more than a year ago, in the midst of similar budget angst. This discussion is far more welcome than that of a tax increase.

The bright minds of the Citizen Budget Advisory Group should be called upon again, not simply as a "think" tank but as a "do" tank.

A mind is a terrible thing to waste.    

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