Altoona needs ‘leaner’ government
The city of Altoona’s finances have made the news lately.
Like many local governments, we’re facing the challenge of building a budget for 2021 without knowing where the economy is headed.
Since January, the federal government has printed over $3 trillion and may print a few trillion more before the year ends. Much of the economy was shut down in response to COVID-19, increasing the national unemployment rate from 3.6 percent to nearly 15 percent in April.
The second quarter drop in the U.S. economy was the largest ever recorded. Oil futures crashed below zero for the first time in history.
Every adult American received a check for $1,200 and unemployment benefits were bumped by $600 per week. Moratoria were placed on evictions.
What does this mean for the 2021 economy and beyond? No one knows. We’re in the midst of one of the largest economic experiments in history. If public debt matters (and I think it does), it’s an experiment likely to end badly.
This is challenging for the city because we had a structural deficit before COVID-19 hit.
We face huge legacy costs in the form of underfunded pensions and unfunded healthcare for police and fire retirees. The city is carrying too much debt and faces major financial challenges dealing with aging infrastructure and unfunded mandates.
Underneath all of that, our core problem is simple. The cost of providing municipal service is increasing while our tax base is shrinking.
A one-time infusion of federal money won’t change this, although it could save some businesses and nonprofits teetering on the edge.
This is why I found Blair County’s announcement of how it intends to spend the first half of nearly $11 million in
COVID-19 funding confusing.
One million dollars (or more) on “broadband?”
A wheelbarrow of federal money won’t turn Sinking Valley into Silicon Valley. If rural broadband was economically viable, the private sector would be providing it already.
There are better ways to grow a local economy. One strategy is to maintain uniformly low taxes through lean, effective local governments.
That’s our focus. Like our local businesses and residents, we are tightening our belts. We have no choice but get smaller.
We’re also working to get better, and we’re not waiting for a bailout.
Altoona found a way to survive the decline of railroads, manufacturing and heavy industry. We’ll find a way to survive the next few years and build a stronger Altoona for the 21st century.
Ken Decker is Altoona’s city manager.