City should have heeded advice on cutting expenses

The city of Galveston should listen to one of its new council members as it addresses the looming budget crisis. So far, Steve Greenberg has done fairly well at resisting the urge to say, “I told you so.”

But he did, in fact, tell people at city hall that this day was coming. He ran for council largely because that advice was ignored.

In spring 2008, before Hurricane Ike, Greenberg and the Galveston Friends of Business more or less made nuisances of themselves, reminding everyone that a slowdown in the economy — perhaps something worse — was on the horizon.

He pointed out that private companies already were cutting spending. He admonished city officials about their habit of increasing the budget, year after year, to a point just below the maximum amount allowed. He suggested that the city should either hold spending at existing levels or cut it back modestly. At the time, some businesses were cutting spending by as much as 4 percent.

Had the city followed that advice, it still would be facing hard decisions today. But the city is facing much harder decisions because it ignored that advice.

Since then, the city’s overall budget has increased by about $12 million, from $81 million in 2007-08 to $93 million in 2009-10. Had modest cuts been put into place in each of those years, the city’s budget might have dropped from $81 million to, say, $75 million.

As city officials look for ways to balance the budget in the challenging conditions after Ike, think what a difference it would make if they were trying to find revenues to match expenses of $75 million, as opposed $93 million.

It’s the difference between looking at a difficult problem and an almost overwhelming one.

People in business don’t like cutting expenses. They don’t like reducing the number of employees by attrition. But they’ve found — through unpleasant experience — that cutting back slowly is far better than ignoring the warning signs and then having to take drastic measures.

As city officials begin budget discussions this summer, expect to hear a lot of gloomy news. The city is in for a dose of bad tasting medicine.

But this roller coaster cycle was and is avoidable. A lot of people — in government as well as business — have learned to break that cycle by controlling costs routinely, even when times are good. The city of Galveston should, too.