That over the next -- Well, the $288 million is beyond -- you know, unexpected beyond that. You know, we just led to that, and now we have this. So my concern is, how do you get hold of the spending side of this, to be able to do the tax reductions in a way that doesn't create devastation. That is my concern. And my commitment in the one area that I do know a little bit about, namely, 572 Whole - 5/12/04 - Operating Budget the reduction of crime --
But isn't your concern resolve by the fact that if in the next year we haven't gotten ahold of the spending issues, then at budget time we would just stop the schedule? We could eliminate the rest of the schedule.
Why do you have so little faith that we would do that?
Because in the five-year plan, that has to be projected now, what will happen a year from now.
Well, but then I think that we're putting into a five-year plan assumptions about service cuts that would be devastating on their face. 573 Whole - 5/12/04 - Operating Budget
But they're in out years in the plan. It doesn't mean that they're --
No. I think that the amount -- The amounts, in fact, would go pretty -- Given... I'll look at this. It's an interesting question, in terms of what I think it would represent next year.
You put a significant service cut in the five-year plan two years out. What I'm taking from you is somehow belief that that's automatically going to happen.
Whether it's in or out, I think the objective would be not to -- not to -- I mean, to -- to be able to preserve as much as we can, and to get the full benefit of the revenues that are created.
But it's in 574 Whole - 5/12/04 - Operating Budget later years. And isn't that all just a function of... Have you had a discussion with PICA about any of this?
I asked PICA only one question. It wasn't a long discussion. And that question was: Does the budget have to be in balance over the five-year period --
-- for you to approve it? And do you have to have confidence in what you see as a reasonable basis for making that decision? And the answer was yes. I just --
Well, I just -- It's been a while since I -- You know, you're here all the time. I am not --
Well, I mean, Joe Vignola testified to that at the beginning of the budget process.
Well, I wasn't here 575 Whole - 5/12/04 - Operating Budget for that hearing.
So, I mean, the question at that point is, what does it look like, and --
And suppose the City Administration presented a five-year plan that was balanced and had out-year unspecified cuts, which that line has been in every five-year plan since we started doing five-year plans, that line, that language. Unspecified targeted cuts is a staple of the five-year plan. It's had upwards of $50, $60 million a year in it. Every one of those five-year plans has been approved.
I am not -- Yes, but the difference is -- And this is where the last four years is relevant -- The levels of cutbacks that we are facing now are dramatically higher than what you've had to deal with in the last five years because there's been a surplus. And at a moment 576 Whole - 5/12/04 - Operating Budget when we have --
Which has been spent away, which by your own testimony -- You never came in here and said anything about it or raised any concerns about it. What did people think was going to happen when you spend up all the money?
What; it just magically reappears? What is it, like a candle that goes out and it comes back on like itself?
That's correct. So that's between... you know, here. I'm merely saying that this is where we are now. And it didn't happen.
This is where we are now. 577 Whole - 5/12/04 - Operating Budget
And we've got two different reports that indicate that if we don't do something different, we're going to be in a worse place.
So tell me when. When do we do something? Give me a date.
Because we know next Thursday, according to Dr. Madden, we'll be in sixth place. They figured that out. So you tell me: When are we going to do something different?
Well, I think, in fact, the reduction of the wage tax, the reduction of business taxes, the reduction of the business... the single factor apportionment, the movement toward a real real estate reform system, at a moment when a City like ours is experiencing significant fiscal crises, is quite different from what we have done and what 578 Whole - 5/12/04 - Operating Budget other cities are doing. You find me another city in the United States -- maybe there is -- that has embarked on a serious tax reduction program, that is now being amplified by our recommendations, when there is simultaneous --
You show me another City has an array of taxes like we have, that has the highest wage tax, highest tax burden in the --
Agreed. So, I did this for a year. It's not like, you know, it was something that I intended to do for 579 Whole - 5/12/04 - Operating Budget a year. I did it for a year, out of my concern --
But you see, Councilman, I will come back to where I started. I was here during the three years when this government went under, and I listened to similar vehement arguments...
And I was here for the first four years when it recovered.
So we have 580 Whole - 5/12/04 - Operating Budget slightly different perspectives on this.
You bet. Because what my perspective was is that everybody had a vehement and adequate argument about what we needed to do that was totally --
-- we didn't almost go under because we were cutting taxes.
-- I think in those years, as I recall the campaign of 1991, I think the facts are is that the City raised taxes 19 times in the previous ten-year period, and you still had financial problems.
Yes. In those days the issue was the fact that we had 581 Whole - 5/12/04 - Operating Budget inherited a whole bunch of social problems for which the City had to take responsibility or face --
Raising all those taxes sure didn't take us out of the problem, did it?
No, it did not. Well, it did immediately. But all I'm saying is, even with all of that --
It wakes you up for a moment and then you go right back to sleep. You get a short-term bump in revenues, and then everybody else figures out: You know, these people are just taking more money out of my pocket, and I'm going to leave. And so the next year you have less revenues, which causes you to raise taxes again. It's an endless spiral downward. 582 Whole - 5/12/04 - Operating Budget
And all I'm saying is that what really happened beyond that is that you had various people who thought whatever we were doing we could afford. And it was perfectly okay to vote for mutually inconsistent -- And the Mayor signed them. And two or three years of that, that projecting deficits into the future, which was the centerpiece of it, whether or not it had anything to do with lowering taxes, which it clearly didn't because Betsy Reveal was attempting to get us to raise taxes to meet deficits. But the central issue was in a way what we're discussing. It was a decision that you could project a deficit forward. And so in 1988 we could project that deficit to '89. And in 1990 we could project it into '91. And in '91 -- And we could borrow our way out of it, and we 583 Whole - 5/12/04 - Operating Budget could use creative techniques. Charley McPherson at that point was working for the Mayor, and I was --
It's the undiscussed thing. If you borrow a billion dollars in a short period of time, your finances will improve, too. That's what we did.
-- what I am 584 Whole - 5/12/04 - Operating Budget saying --
The problem here is, you've got a bunch of people who are so scarred by the past that they can't figure out what the hell to do in the future.
Well, you may say that. What I see is, in fact, a period of time of time in which people said we could put our problems, and handle deficits, and they were doable and soluble.
Now we're saying 585 Whole - 5/12/04 - Operating Budget we're going to put off tax --
That's exactly what I hear here. We are looking now at a budget that has got lots of problems, and we're saying, don't worry about it because you'll get --
-- put into the five-year plan. We will put into the five-year plan --
Mr. Schwartz, do I need to remind you how you got to be on the Tax Reform Commission, whether you 586 Whole - 5/12/04 - Operating Budget wanted to be there or not? Some of us didn't say, don't worry about it. Some of us said, let's have a more systematic, organized process to put something together. That's why we had a Tax Reform Commission in the first place.
Then we got a report from dedicated, serious citizens, 12 who told us what to do. 13 Then we got another report two 14 months ago from another group of people, I 15 think a half a dozen --
-- sitting on a tax subcommittee who told us to what to do --
And now we have a real -- Now we have a real budget, not a hypothetical one, not a what-have-you-got-in-your head. You've got a real budget. 587 Whole - 5/12/04 - Operating Budget
You think this is a real budget? You think this budget is going to get passed the way it is?
I'm just saying that now you have a real budget to debate and resolve.
With real money and not well-what-do-you-think-of-the-City-budget, but-we're-not-going-to-talk-about-it budget.
That's why we 588 Whole - 5/12/04 - Operating Budget get paid the big bucks. Go ahead. I'm sorry. I cut you off.
All right. Okay. So your bottom line is, one year at a time, do what you can, and we'll see what happens. Is that pretty much the sum and substance of it?
Yes, but I would make one addendum to it. I do think that when I'm looking at this -- It's not -- It's not quite, you know, we're just going to look at one year and then let the next year take good care of itself. As I... And then, you know, you only do that year. As I see the timetable here is, we came out with our report, you know, earlier this year. And then the Mayor extended the budget process into the spring.
Well, because he 589 Whole - 5/12/04 - Operating Budget had to wait and see what you guys were going to tell us from the 21st Century Review Forum.
That was the public explanation: We can't introduce a budget --
-- because we got to wait and see what the 21st Century Review Forum tells us, so we can incorporate that in the budget.
Well, actually it's interesting, because the budgets when we were around in those days, I believe, came out in March, around this time. And then it was moved to January which may be a good thing, but...
It moved to January in 2000. We've had them in January ever since.
By the way, I saw that as useful to the agenda that we were providing.
-- unuseful and it's been a disservice to all the members of this City Council. 591 Whole - 5/12/04 - Operating Budget
It's a little difficult to do in two months what you normally have four months to do.
Given that what we were proposing was new and different and difficult, it gave us more time to lobby, which I did. But let me just say, we have a full year now from whatever it is you do --
You lobbied for the same thing that you guys did in November.
I'm talking about the real battle within the Administration or with the Administration to accept as much of this package as we could get for --
Well, I wouldn't know anything about that. 592 Whole - 5/12/04 - Operating Budget
It was not your battle to fight; it was ours. And we did. And I did. Now, where this --
-- mistakenly thought I was part of the budget process --
If it's now been 593 Whole - 5/12/04 - Operating Budget out sourced...
I think you know I didn't say that. I really think you know I didn't say that. What I said, in fact --
Well, what I said, in fact, is that Tax Reform Commission has an agenda. It's new, it's different. It came 594 Whole - 5/12/04 - Operating Budget out --
Yeah, it has an agenda. It's called 28 recommendations.
-- it was called in year 17, the following set of things should happen. The following set of things should happen this year, and we fought over those things. And having a little --
That was the Tax Reform Commission's agenda, but now your agenda is different now than the --
No. My agenda is not different, in terms of tax reform. It isn't. The questions --