The budget tsunami that’s hit California in the wake of the May 19 vote will take its heaviest toll on smaller cities.
Without big industries such as technology or entertainment to cushion the blow, smaller communities will face increased taxes and a money grab by the state to fill budget coffers. In the Central Valley and elsewhere, smaller cities will see smaller sales tax levies as the reduction in state payrolls deepens the downward spiral.
What to do?
Smart cities will survive by doing what the state refuses to do — permanently reduce their structural level of outlays. Here are some thoughts about how smaller communities might find a more businesslike footing:
• Outsourcing: Many nonprofits already duplicate some services offered by local governments. Why not subcontract with nonprofits who pay their workers less and aren’t encumbered with pension liabilities?
• Furloughs: Santa Barbara County and others have hit on the idea of temporary work furloughs as opposed to layoffs. These hit employees in the pocketbook, but they do offer a way to reduce the overall cost of payrolls. They may lead to more permanent measures such as across-the-board salary cuts.
• Pursue joint ventures: Merging community healthcare organizations on the Central Coast saved a ton of overhead, and the same thing might be true with other social services programs.
• Cut overhead wherever possible: Most organizations have ways to economize if they think about it hard enough and have the courage to accept that change if inevitable.
• Think green: Energy, water and solid waste all come with big costs. Investing in new efficiencies will both grow the economy and pay dividends in the form of cost reduction down the line.