“Elected officials and taxpayers alike are coming around to the idea that before taking on new obligations that it would be prudent to develop a strategy to reduce the red ink already on the books,” McDaniel writes. “The solutions are surprisingly simple. There is a way to avoid living on borrowed dimes.”
Take Tyler, for example.
“And at one point, Tyler held $41 million in tax-supported debt,” he explains. “But Tyler is a different place today. It is a city that has been transformed since it ended its reliance upon tax-supported debt more than four years ago. In 1995, Tyler residents approved a half-cent sales tax to retire tax supported debt. In return, the city promised to reduce property tax rates by 15 percent and pay cash for capital improvement projects from that point forward.”
Sure, there was skepticism. But the city kept its promise.
That’s something to be proud of. Many of the efficiencies were found in the principles of “Lean Six Sigma,” a management concept more often found in the corporate and manufacturing worlds. But it can be adapted to cities, and Tyler has a AAA bond rating to show for its efforts.
“When debts are reduced or eliminated and governments fight inefficiencies, local leaders are put into a better position to keep taxes low, attract new residents and businesses, actually enhance the quality of services, and have their fiscal house declared safe and sound,” McDaniel says. “A change to the fiscal order will come to communities of all sizes in time. The only question is will it be done by choice or by necessity.”