Monday, April 18, 2011

Compound errors

The local conservative weekly, the Rhinoceros Times, has an article about runaway public spending in Guilford County.
Now that the 2011-2012 Guilford County budget process is in full swing, with the county manager's proposed budget on the table and the budget ball in the county commissioners' court, it's interesting, and even kind of fun and nostalgic, to look back 10 years and see how things compare.

One look at Guilford County's budget for fiscal 2000-2001 and it quickly becomes evident that, while 10 years wasn't that long ago in some respects, when it comes to county budgets it was light years ago and a galaxy far, far away.

One way the 2000-2001 budget seems very distant from today is in the number of dollars shelled out. Just a decade ago, Guilford County was being run on a much smaller budget: The 2000-2001 budget totaled $397.5 million. That compares with a proposed county budget of $582.3 for 2011-2012 – a 46 percent increase in the county's budget in just 10 years.

The population of the county only went up 16 percent from 2000 to 2010, from 421,048 to 488,406.
Joe Guarino piles on
Spending increases in these areas outpaced population growth and inflation combined.

When county commissioners wring their hands and represent that they cannot conceive of ways to achieve spending cuts sufficient to avoid a tax increase, they are not being honest with us.

The fact is that we have had solid liberal Democratic leadership of the county for a long time, with all the fiscal profligacy that entails.
The figures that the Rhino and Joe put forward look like a big increase, but they aren't when you also account general price growth.

Over the last 10 years (from March 2001 to March 2011), overall price inflation as measured by the Consumer Price Index went up by 26.9 percent.

The combination more than accounts for the growth in spending.

In 2000-1, the county was spending $944 per resident. In 2011-12, it is proposing to spend the equivalent of $939 per resident, based on 2000-1 dollars.

Far from letting spending run away, the county has kept its spending slightly below the combined rates of population and price growth.

Guilford County is facing a tough budget situation. However, the crunch has been caused by falling revenues, not exploding costs. Property values have fallen, depleting the county's largest source of revenue. The state and federal governments will also be transferring less money to the county next year.

In inflation- and population-adjusted terms, Guilford County has kept its expenditures frozen.