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Politics & Government

Seven Essays: Taxing Questions

In business, when costs rise and revenue goes down, the company scales back. Should it be the same with government?

As with some of the other topics in this "seven essays" series, I'm asking people who are a lot smarter than I am to offer some answers in the comments field.

  • When property values go down, should the size of local government go down, too?
  • When you know the tax base is shrinking, how can you OK salary increases in a range or 2 or 3 percent—even if they're well-deserved?
  • Does government need to cut jobs and pay, as companies have done in the private sector?
  • Or are there good reasons for government to play by a different set of rules?

Hard questions.

One thing that's clear from my perspective covering local govenment over the past three decades is that there has been a sea change in the last two or three years. It used to be a given that property values would go up. New development would add value to the tax base, yes, but even if no new homes or businesses came into your town or district, home values—property value—would always rise, right?

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Not anymore.

Now, in the private sector, if your revenue goes down, then your expenditures have to go down, too—if they don't, you go out of business. Sadly, there are few industries in which workers haven't seen big-percentage paycuts, furloughs and layoffs.

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And I think that's one of the things that bothers folks like the members of the Geneva TaxFACTS citizens group. I'm not "taking their side" here, but I am saying that government entities seem immune to the conditions we've witnessed in the private sector.

Just looking at a couple recent news stories about teachers' contracts, police contracts and union negotiations, you see a lot of good people coming together to make good decisions and compromises.

Kaneland School District teachers (and other professionals) agreed to a wage freeze in the first year, 2.7 percent the second year and that the contract would be reopened for negotiation the third year.

As this is written, the city of Geneva is considering a that would give police officers raises of 3.5 percent, 2 percent, 3 percent and 3 percent.

Geneva School District officials are in the midst of negotiations with the teachers union right now, and the results of those negotiations will be of more than passing interest to all of us.

I think few would argue teachers and police officers and firefighters and public works employees are rightfully revered and are often underpaid for the great service they do for the community—for all of us. There is no doubt in my mind that they merit much more than the 2 percent or 3 percent increases we see in their contracts.

The thing is, isn't that also true of all the other folks who've lost jobs, income and benefits in this brutal economy?

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