Skip to content

The City Café

For those interested in sharing ideas and perspectives regarding local government.

Category Archives: Budgets


May distribution came out and apparently March sales were up substantially from last year: 15.5%.  The first quarter was up 8.4%, very good especially after the 0.5% increase in January sales. (We are getting a bit of a quarterly pattern of a very small 1st month, followed by better 2nd month and a very big 3rd month.)

In fact, fiscal year to date (9 months now in the bank) is now also up 8.4%.   This is better than our forecast for FY2012 of 7.9% presented in St. George.

We’ll keep you posted.  No data from the U’s BEBR on first quarter housing starts, so don’t know if housing contributed yet.  But wages and salaries are looking like 6% growth this year.

1% Local Option Sales Tax Distributions May 2012


DOUG MACDONALD                      

California Governor Jerry Brown

When a governor sends a budget to the legislature with a $5 billion hole in it, does it really fill his requirement of submitting a balanced budget?  That’s what Governor Jerry Brown (D) did last month as he said he would fill the $5 billion budget gap (on $89 billion of revenue) by persuading his electorate to pass an initiative that would increase “temporary” taxes and “weight fee” revenues to the tune of $5 billion.  Governor Brown had little wiggle room in this matter since he promised in last year’s campaign not to raise taxes, despite the structural deficit, unless he went to the voters for approval.  Nevertheless, if the initiative does not pass, Governor Brown’s budget cuts K-12 school spending $4.8 billion, $400 million from California universities, and $125 million out of California court budgets.  Complicating the cuts if the initiative does not pass is the technical fact that the schools would feel almost double the fiscal pain, since the full-year cuts might be enacted in the sixth month of the fiscal year after the November election.

If that doesn’t sound like a way to “best manage” a budget, one has to consider…Read More

Monday, December 12 was the final Legislative Policy Committee meeting for 2011.  The agenda focused on transportation options, and included speakers from different levels of government.  Representatives from Senator Orrin Hatch’s office, Federal Transportation Administration, Utah State Legislature, Utah Department of Transportation (UDOT), Wasatch Front Regional Council, and the Utah Transit Authority (UTA) spoke on the financial reality facing transportation appropriations and what the lack of money could mean to Utah’s entire transportation infrastructure… Read More


The chart above illustrates the difficulty in cutting $200 billion or $400 billion per year from the federal budget.  But there are some tips for analyzing the process.

  1. The top four areas (Health Care, National Defense, Income Security, Social Security and Net Interest) comprise 77% of the budget.
  2. More than half of the talk-show rhetoric abused programs are in the smaller budgets, which comprise 17% of the budget.
  3. The top 4 programs have significant constituents and lobbies.  For example, the 19% spent by the Defense Department hire contractors, some of which are the biggest corporations in the country.  Second, people more than 65 (years of age) vigorously support the Social Security (20%) and the Medicare program (13%, within the Health Care slice of the pie).

Rule #1 in federal budgeting:  Most program costs are often cited run over a10 year period, so divide by 10 to ascertain the annual cost.  Politicians like the bigger numbers because they get attention and headlines.  We are not saying that presenting fiscal notes over a ten-year period is misleading, it is necessary, but when people look at annual revenue and hear trillion dollar impacts there can be a disconnect.


Recent data from local sales tax distributions and taxable sale from the Tax Commission paint a Utah economy that is shifting into second gear.  This was confirmed by the Commerce Department third quarter GDP report, which estimates that sales and services grew 2.5%.  In Utah, taxable sales are 5% to 6% ahead of last year’s levels.  Utah consumers, at least those who have steady incomes, have put off buying new cars and trucks since the financial crisis in 2008.  So recently some of that pent-up demand was unleashed.   The latest taxable sales figures from the second quarter of 2011 indicate that motor vehicle sales were up 25% (see table).  Apparel store sales were up 11% in the second quarter.  Apparently, those consumers with steady incomes are replenishing their F-150s and clothing wardrobes.

Behind the increased spending on autos and clothes is a job market that is shifting into second gear.  Following the 5% decline in 2009 and a 0.6% drop in 2010, Utah job growth will range between 2.2% and 2.5% in 2011.  In fact, the August and September increases in job growth in Utah were up 2.9% and 2.8%, respectively (see chart below).  Hot sectors, increasing 3% or more so far through September 2011 were: natural resources & mining (+6.2%), manufacturing (+5.7%), professional and business services (+7%), and leisure and hospitality services (+4.2%).  Construction and government employment, which fell 0.4% and 0.8%, respectively, dragged down job market growth in September 2011.


How are the economic forecasts for 2012 shaping up?


ULCT’s Cameron Diehl and Nick Jarvis spent last week in Washington, D.C., meeting with staff members from Utah’s congressional delegation, the International City Management Association, Facebook, and the National League of Cities.  The League’s Roger Tew, who was coincidentally on vacation with his family in D.C. at the time, also joined them for some meetings.  He did not, however, have to share the red-eye flight to Baltimore with our other staff members—apparently Cameron and Nick are either more adventurous or less insightful in their youth!

Cameron and Nick discussed the League’s federal outreach with staff from each member of Utah’s congressional delegation and explained the objective of the monthly federal question on the website and urged the delegation to use ULCT as a resource in communicating with Utah cities.  They encouraged the staff members to notify the League of how their offices are interacting with cities so that we can promote those efforts and they all expressed interest in participating in upcoming ULCT events such as Local Officials Day and the 2012 conferences.  Likewise, they discussed transportation funding, the progress and consequences of the “super-committee,” and the future of the federal budget.

For example, Senator Hatch’s office offered the expertise of the Senator’s staff on the Senate Finance Committee and briefed ULCT on the status of transportation and other federal funding before the committee.  Senator Lee’s office arranged a meeting with Facebook’s governmental relations staff (discussed in more detail below) and outlined the Senator’s upcoming “Virtual Mike” plan to broadcast Senator Lee from DC to city council meetings and other events.  Congressman Bishop’s office suggested how to coordinate outreach and alerted ULCT of potential bills of interest currently in Congress.  Congressman Matheson’s office gave examples of the Congressman’s activity with Utah cities.  Congressman Chaffetz’s office explained his emphasis on the need for a federal nexus connecting federal funds to local projects.  Senator Lee and Congressman Matheson provided Cameron and Nick with a behind-the-scenes look at the Senate and a capitol tour—Nick’s first time ever in the U.S. Capitol!

Cameron and Nick met with Katie Harbath of Facebook to discuss the use of social media by government and some of the recent changes the social networking site has made to allow entities like the League and its members to more easily target their desired audience.  Ms. Harbath expressed a willingness to work with Utah’s cities and towns on developing their social media skills—from how to set up and use a Facebook account to utilizing the site’s Ad, List, and Insight features to make the social media experience more fruitful for local governments.  We look forward to working with Katie and her counterpart at Twitter, Adam Sharpe, in the future as the League plunges into the 21st Century towards eventual domination of the Internet!

ULCT staff was also able to meet with four different representatives from the National League of Cities to discuss their upcoming Congress of Cities in Phoenix, AZ.  The event will take place November 9-12, 2011 and will consist of a series of four concurrent conferences, each with their own important theme for municipal governments: Economic Development, Green Cities, Infrastructure, and Your City’s Families.  NLC was impressed with Utah’s achievements in each of those areas, in particularly by the League’s unique interaction with youth during our annual Local Officials Day.  ULCT staff also discussed international outreach, potential conference speakers/presenters, and the successes and failures of various conference formats.

ULCT also met with NLC staff and the International City Management Association to discuss ULCT’s blossoming relationship with Mayor Yeah Samake of Ouelessebougou, Mali and seek recommendations for fostering a partnership with the Mali League of Cities.  We will continue to develop our relationship with NLC in order to continue to improve conferences every year, and to share with other state leagues our successes and new ideas regarding such events.

As such, the DC trip was productive and introduced Nick to the nation’s capital for the first time.   ULCT anticipates a rigorous discussion with the delegation about how the federal government’s action (or inaction) impacts Utah cities and appreciates their universal willingness to talk with us.  We all agreed that they and Utah’s municipal officials “all represent the same constituents” and we look forward to working together.  Keep an eye on the League’s website for upcoming questions and answers on the What’s D.C. Thinkin’? link and check ULCT’s Facebook page for pictures of the trip.

Central Falls, RI is broke.  A withering tax base coupled with pension obligations has forced this old New England textile town to file for bankruptcy under US Code Chapter 9 Title 11.

On Point guest host  Jacki Lyden, leads a discussion centered on municipal budget issues and what happens in the rare circumstance when cities can’t pay their debts.

Listen here

“How Central Falls became a city with a troubled future may be an object lesson for many other municipalities around the country who are in dire straits.”

%d bloggers like this: