In an old Broadway musical, "Music Man," a lead song warned of "trouble in river city." It would be difficult to find any time in the last half-century when Seattle or most other American cities have been in as much trouble. No, it's not just floods, tornadoes, tropical storms, or oil gushing out of the ocean floor; it's the realization that our economic bubble has burst. So mesmerized by the bountiful life we all have had, many Americans and their leaders didn't take the need for austerity, even at the local level, seriously enough.
Our financial trouble lingers from a recession that hasn't been safely overcome even now. The trouble now isn't from trading in derivatives, but from not having the revenue to meet governmental payrolls that swelled during the booming years, along with cities borrowing excessive amounts of money for infrastructure that existing economies can't repay.
While of little solace, we aren't alone. Over half of the nation's cities are in a form of fiscal crisis. San Francisco, Houston, Los Angeles, and Pittsburgh are among many who have contemplated bankruptcy. Revenue, much from sales taxes, has plummeted, and with unemployment hovering around 9 percent nationwide, people simply aren't spending as much as they did a decade ago. With record numbers of homes in foreclosure, property taxes aren't always collected, and the same can be true with real-estate excise taxes.
To make matters worse, while there are some bright aspects to the economy, world financial advisers are more than a little concerned that there are so many nations carrying debt they can't repay and that their collapse might take healthier nations along with them. Last year's bailouts of financial institutions both here and abroad weren't much more than the Dutch boy with his finger in the dike.
European nations and the IMF have agreed to bail out Greece, which can't pay its debt, and they are worried about Portugal, Spain, and Italy. Many Greeks are rioting in the streets in opposition to the austerity requirements for getting international financial aid. The Greek people feel entitled to pensions and government subsidies.
The problem for our local leaders seems to lie more in their unwillingness to realize the few who are shouting “fire” really mean it. The attitudes of local governments are a bit like the tendency to deny that we each are getting older. We don't really want to believe it, but things just aren't what they used to be. Denial is one stage of death.
Here in Seattle, which was slower to feel the effects of the recession, our leadership is just starting to wake up to the realization that we are in far greater financial trouble than we were willing to acknowledge. At first, budget deficits of $40 million were discussed. Now that revenue is unlikely to rebound in the near future, budget deficits as high as $120 million (over the next two years) are being discussed.
There was a day when the mayor and city council would, with an almost cavalier attitude, choose some city service to take the hit, such as closing a library or park. The actions had the appearance of inflicting pain more than doing any serious budget decision making. Another tactic was to trim a few percent from all departments.
This time, cutting library hours, increasing parking fees, or closing bathrooms in parks won't come close to solving our financial crisis. Those won't be enough because in those affluent years our progressive spirit initiated many new programs that responded more to ideas of what we wanted and less to what was essential. We hired new city workers to implement the programs because we had the money. Now the money is gone.
Seattle has always had an aura of adolescence about its image. We perceived our zits were visible, that they somehow prevented us from becoming that "world class city" we wanted to be. We dabbled for years in cosmetic improvements rather than setting aside money to replace things that were certain to wear out. The Magnolia Bridge was but one example.
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