Citizen's View: Are there tax clouds on the horizon?
There is a tax storm coming. Can we get out of its way?
Our City costs are going to see a significant increase, and we are not prepared. Several events outside City control are going to cause this increase. First, PERS (Public Employee Retirement System) costs are going up and are going to continue to go up every year for the foreseeable future at a rate of about 7 percent. Second, health care costs are continuing to rise. Third, the state minimum wage increase is going to drive up wages for City employees.
Employees currently represent more than 80 percent of our City costs, so these changes are important.
The benefits we pay our City employees are going to exceed 70 percent of their salaries in the coming year. That means for every dollar in salary we pay, we have to pay another 70 cents for PERS, health care, etc. That is far more than private industry. The average annual total cost of a City employee will be over $122,000!
But we are doing very little to prepare ourselves for this coming storm. We are finding a dollar here and there to get by. We are deferring needed expenses for maintenance of infrastructure like roads and bridges. But these steps are not real fixes to the long-term issue. They are akin to a finger in the dike.
We need a strong action program now to prepare the City for the future. It should include steps like these:
Upgrade existing software systems to become more efficient (so that it takes one person instead of three);
Outsource non-critical services (a person cutting grass costs us $80,000 a year); and
Cut back non-core services (police, fire and water are core).
Our City Council says people expect a high level of service. But do citizens know what software systems are used, and even if they do, does it matter? And who is riding that lawn mower? If we gave citizens the choice of significantly higher taxes versus making the suggested changes, wouldnt they say lower taxes?
Other cities in the area have already made some of these changes. West Linns parks are maintained by an outside service, for example. Lake Oswego is one of only two cities in Clackamas County that has its own 911 service (we serve West Linn, too); all other cities use Clackamas Countys service.
There are some cities in the U.S. that have very few City employees with almost all services outsourced. Why? Because they know that the costs are lower, and that means lower taxes! No more PERS and other benefit increases.
We need leadership that has a horizon longer than one year. Leadership needs to think three to five years out and take action now to put us in a strong position for the future. We need leadership that is willing to address issues and lay out the situation and choices clearly for our citizens.
Think about this for a few minutes. Doesnt it make sense to be preparing ourselves now for the coming storm, rather than hiding the problem?
There is an election coming in November. Who you vote for will have an impact on your tax bill. Ask every candidate how they will deal with the coming cost storm. It is your money that is at stake.
Gerry Good is a Lake Oswego resident and a member of the Citizens Budget Committee.