The Problem of Having Too Much Money

After spending the first half of the decade in the red, the City of
Philadelphia had a budget surplus in 2005 and is budgeting another,
larger one for 2006. Credit an expanding economy, the local real
estate boom, and a climate that might actually be getting friendlier
to business.

You'd think that bringing in more money than you take in would be
great, but it does come with its problems. For one, Mayor Street has
spent most of his term in office using the budget deficit to drive his
political persuading: cautioning against further cuts in business
taxes, pressuring agencies to tighten their belts, even using
reductions in cuts as negotiating chips with other local power
brokers. Also, with the extra cash comes a whole line-up of
politicians hat-in-hand, declaring that to not use the surplus to
support their pet issue would be irresponsible, short-sighted, and/or
morally wrong.

I understand that public finances are a political game, so perhaps it
is unfair for me to say this, but what about doing the kinds of
prudent things that individuals and families do when they bring in
more money than they spend? Instead of just raising their standard of
living, they pay down debt or set up a college fund or put some in a
rainy day jar. If they're going to spend instead of save, it'll be
for stuff like a new kitchen or replacement windows, things that they
can derive enjoyment from but that also increase the value of their
property. And maybe one nice dinner out with the kids, to celebrate.

Similarly, Philly would do well to do municipal equivalents of these
kinds of things. They can set up rainy day funds and do other fiscal
things to improve their credit rating, which allows them to borrow
money for things like bridges and parks at a cheaper interest rate.
They can start hacking away at their long and growing list of deferred
maintenance projects, which left longer undone can erode city assets
and diminish quality of life for residents. Or they can lower taxes
or do other things which eat into the surplus in the short run but
which attract residents and businesses for the long run.

The trouble with getting any of these things done is that they are all
things that make sense in the long run. But the people who propose
and haggle and vote and implement are all elected or appointed in
short-term cycles. It seems, then, that we are destined to substitute
short-sighted deal-making for the kinds of prudent choices smart
families make? But wait a minute, who votes in these politicians?
That's right, you and me. And if we plan to be in Philly for a bit,
or even if we don't but we love it and want it to be set up for
decades to come, we should let our elected officials know how we want
and don't want that surplus to be spent.