Opinion and Economic Analysis and Banking & Finance

HICKS: Cash-strapped cities paying for prior choices

February 27, 2010

Twenty-odd years ago, I found myself in the enviable position of infantry 2nd lieutenant and executive officer of a basic training company. Among the many tasks of a company executive officer is feeding soldiers. Why that was entrusted to a 22-year-old is beyond reason, but—since tradition dictated the exec ate last—I was at least enormously attentive to appropriate portions for the 300 soldiers we fed thrice daily. Otherwise, I went hungry.

We were given a bit of leeway on meals, relying on a system that counted different meals as points, not dollars. I could choose what types of meals we wanted. So, we could eat two portions of a low-point meal (like chili-mac) or a single high-point meal (like steak). We were all young and hungry, so quantity mattered a lot. We leaned toward cheap food, and lots of it was devoured in the field. We ate the good stuff on special days (Sundays mostly).

We did the same thing with ammunition and transportation. The drill sergeants (who taught me more than any professor) and I were experts at making budget choices. But it was the Army, so there was no shortage of grumbling. I explained the dilemma to my company in terms of tradeoffs, not dollars. We could eat double rations of chili-mac or one steak; take lots of three-mile marches and then ride on a 12-mile trip. I think that remains the best way to explain budget choices. We all understand tradeoffs.

A few communities in Indiana are struggling with budget choices. I work in one of these communities, and its woes are a perfect illustration of the problem of explaining budget terms in relatively abstract terms (like millions of dollars) instead of concrete tradeoffs. For at least 30 years, Muncie has been making bad choices about the mix of things the city buys. We are making budget cuts today that could well have been slowly phased-in for a generation. What are the implications?

Muncie, like most places now struggling with budgets, is missing some key amenities. So here’s the question: If we had had the courage 30 years ago to make the cuts we now have to make, and used the extra revenue for something else, what would we have? The answer is terribly disheartening.

If we’d made the budget cuts 30 years ago, we now could have three indoor community pools, a completely revitalized arts center, or paved streets with modern traffic control systems. Muncie’s schools could have had an extra $1.5 million annually for reading programs and all-day kindergarten. We would also have a bigger tax base and lower taxes because these things attract residents and businesses.

Oh, and for those 30 or so young Muncie firefighters who lost their jobs because of much-needed budget cuts: They are just like my soldiers who ate chili-mac four days a week. The only difference is that there’s no steak night for them, or for taxpayers.•

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Hicks is director of the Center for Business and Economic Research at Ball State University. His column appears weekly. He can be reached at cber@bsu.edu.

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