What’s going on at the local level?

(8 am. – promoted by ek hornbeck)

I know we mostly talk about federal politics and policies here because that’s what we all have in common. But for me, this economic crisis just got REAL serious this week and its breaking on a state and local level. I have to admit that, for the first time since this mess started, my stomach is in knots – its getting ugly out here. So I wanted to write about what I’m seeing and invite you to fill in the picture of how its unfolding in your area.

The news this week in Minnesota has shifted a bit from the recount between Franken and Coleman to the state budget deficit. Our state operates on a fiscal year of July to June. For the budget year we are currently in – the forecast is for a $426 million deficit (that’s in a budget of just over $30 billion). What that means is that the Governor and Legislature have to come up with $426 million in cuts to the CURRENT budget – and we’re already halfway through the spending year.

In Minnesota, social services, corrections and courts are managed by Counties instead of the State. Cities, Counties, and Local School Districts depend on property taxes, as well as federal and state aid. The State collects income and sales taxes and then supports Cities, Counties, and Local School Districts with local government aid. They make two payments a year on this with the second payment of $280 million due December 26th. The easiest way for the State to take a big stab at making up for this huge current deficit is to reduce/eliminate this payment. So that’s whats likely to happen in the next week.

Our Mayors, City Council Members, and County Boards are just beginning to brace for what that will mean. Last night I heard from the City Budget Director that the Mayor of St. Paul has asked all departments to cut 20% from their budget. For the City, this comes from police, fire-fighters, public works, libraries, and parks and recreation centers.

But the issue gets even uglier in the counties where the entire safety net for people is operated. At just the time when more and more people will need this net for survival, its likely to get torn to shreds.

I have to admit that I also have a personal interest in all this. The budget of the nonprofit I work for depends on City and County contracts for about 1/3 of its budget. Since what we provide is prevention and early intervention, we’ll likely be the first to go.

Oh, and this is just the opening salvo. Once the current budget is cut – the next step is that the State is projecting a $4.8 billion deficit in the next biennium.

If part of the progressive mantra is to “care for the least of these” in our midst, this kind of thing is where the rubber meets the road. I know that Obama is talking about a major stimulus package as soon as he’s inaugurated. My hope is that part of that package is aid to state and local governments to help them with their budget deficits. Some of that might come too late to maintain some services. But, in addition to creating jobs, a priority ought to be to maintain the safety net!