By John Ramos
After observing Duluth politics for many years, it has become apparent to me that the city has a split personality when it comes to budgetary matters.
On the one hand, our leaders bemoan the woeful financial state of the city. The retiree healthcare obligation, the state’s reduction of local government aid to the city, a stagnant tax base, and the ongoing financial drain of projects such as the Great Lakes Aquarium and the Technology Village all combine to paint a picture of the utmost budgetary dreariness. Everyone agrees that something serious needs to be done. This is the “mind” (or rational) side of Duluth’s personality.
The “heart,” or emotional, side will have none of this. No matter how dire the fiscal situation may be, our leaders, at any given moment, are working to build some new, grandiose project—and, beyond that, they are thinking of new, grandiose projects to build in the future. They fund some of these projects directly, through bonding, taxation, and robbing the street fund; and others indirectly, through tax increment financing, which shrinks the city’s tax base even further.
If a project is sufficiently gigantic and glamorous, our starry-eyed leaders—spurred on by tourism moguls, trades unions, and ninety percent of the media—will do anything to build it.
The current big project everyone supports is the DECC expansion. The future big project is the re-establishment of railway service to the Twin Cities. In a recent forum, mayoral candidates Don Ness and Charlie Bell—two very different candidates on the surface—both declared themselves firmly in favor of the railway project. There can be no doubt that this project will cost a tremendous amount of money—money that the city does not have, and will have to borrow or steal from somewhere, under cover of optimism.
One reason these projects march forward steadily, one after the other, without regard to financial reality, is that real economics only plays a partial role in their realization. Another, more significant, aspect is influence. If we elect legislators who can accrue influence at the state and federal levels, those legislators can often secure large sums of money for grandiose projects. Sometimes it seems as if this is their only purpose.
Over and over, we hear the argument that if the city puts up “only” $1 million, or $3 million, or $5 million to build some new dream, we will get twice that, or three times that, or four times that, from other levels of the government. Questioning whether the city can afford its portion is enough to get one labeled an anti-progress naysayer—not that there are many who question. Whenever our leaders manage to finagle some way to finance the next big thing, generally by driving the city further into debt, they are patted on the back and congratulated for their creativity.
Government has a fairly high turnover rate. City councilors and mayors come and go, reflecting the changing desires of the electorate. Big projects, however, stay firmly on track through every turnover, passed like a baton from one generation of leaders to the next. Obviously, these projects depend on someone other than our elected representatives for their momentum and continuity.
Behind the scenes, the city’s most influential private citizens are always pushing for the next big thing. Supremely unaccountable to the public, the whims and desires of these plugged-in magnates affect public policy at least as much as the actions of our politicians.
As long as the present system holds sway, we will not be able to fully address the city’s underlying budgetary issues. It does not appear as if the system will be altered anytime soon. Any meaningful proposal for reform—say, a ten-year moratorium on big projects—will be met with incredulity and disbelief. Any real push for fiscal discipline will be inevitably overwhelmed by the shining promise of the next big thing.
The DECC expanded in 1998, financing the project with revenue from the city’s food-and-beverage tax. To expand again, the DECC needs the state to levy an additional food-and-beverage tax on the city. In 2006, we had a referendum on whether we wished this to happen. Overwhelmingly, voters said yes.
The additional tax is necessary because the money that was originally intended to finance the DECC expansion has been siphoned off to pay for the Great Lakes Aquarium. In its time, of course, the aquarium was the next big thing. The failure or success of these projects seems to matter not at all. Building them is the goal.
The funny part is that, at election time, all of the problems created by the city’s compulsive overspending on big projects are capitalized on by the very politicians who did the spending. They point gravely to the budget deficit and the potholed streets and gain reelection on platforms of fiscal discipline, at which point, spurred on by their cheering constituents, they take up where they left off, dumping truckloads of money on the next big thing.
Can we do anything about this? Well, we can clap our hands over our ears, race around in circles on the lawn, and howl our frustration at the moon.
Beyond that? No, not much.