FFM Bulletin 8/8/08

CITY SPOTLIGHT: City of St. Francis cuts workweek, expands everything else

Municipal employees in the City of St. Francis will be moving next month to a four-day workweek as part of a 6-month pilot project. The city - located in northern Anoka County - made the decision ostensibly to improve customer service and save the city money on utilities. City officials have not provided an estimate of potential cost savings.

While it's always nice to see city officials trying to save taxpayers money, this would seem to be the first time it's occurred to St. Francis policymakers. For years, the city's policymakers have been fiscally irresponsible, allowing city taxes and spending to skyrocket, far outpacing inflation and population increases.

Here are some fun facts about the tax-and-spend practices in St. Francis:

  • Between 2002 and 2008, total city spending surged from $2.4 to $5.8 million, a 139 percent increase. The population of St. Francis increased by just over 30 percent during that same period.
  • Local taxpayers have generously bankrolled the city's spending, as the annual tax levy increased 144 percent (from $765,200 to $1,864,727) between 2002 and 2006.
  • And in addition to footing the bill for the city's lavish spending, St. Francis taxpayers are now being asked to vote for a school referendum to cover the school district's projected $4.5 million deficit. The referendum would increase per pupil spending by more than $265 dollars. If the referendum passes, property taxes on a $200,000 house would increase by more than $100 per year. Meanwhile, enrollment in St. Francis schools is actually projected to decrease by about 100 students by the 2009-10 school year.

So while St. Francis leaders tinker with work schedules to save a few bucks on air conditioning, perhaps they could also focus on more substantive ways reign in spending and give their taxpayers a break.

State and local governments across nation spend money they don't have

A new report from the Bureau of Economic Analysis finds that state and local government spending increased 7.8 percent in the second quarter of this year compared to 2007. For the first time in history, state and local governments may top $2 trillion in annual spending. Meanwhile, revenue collected between the second quarters of 2007 and 2008 increased by 2.5 percent. It doesn't take an accountant to spot the problem with allowing expenditures to increase three times faster than revenue. If you're wondering where that money went, the Bureau of Labor Statistics may have pinpointed a major cause of this problem. Between June 2007 and June 2008, state and local governments hired more than 240,000 new government employees.

According to USA Today, the spending growth "is financed mostly by debt and budget reserves." This is reinforced by the Federal Reserve's finding that state and local governments accounted for $2.2 trillion of debt in early 2008, a 7.9% increase from the previous year.

Freedom Foundation of Minnesota internships Freedom Foundation of Minnesota would like to thank research assistants Rob Cohen (Colgate University), Christina Pajak (Wheaton College), and Nate Swanson (William Mitchell College of Law) for their outstanding research and communications support throughout the summer, as well as their work on the FFM Weekly Bulletin. Each will be completing their internship and returning to school in the coming weeks. We will miss their professional and personal contributions to our organization.

With the fall approaching, there are full-time and part-time internships available. If you are interested, please contact Jonathan Blake or visit Freedom Foundation of Minnesota online.

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