Local governments face hard financial choices

info@islandpacket.comMarch 14, 2012 

Now is the time to heed the warning of tight financial times ahead for the Town of Hilton Head Island.

The town has been working on it. It has cut 15 positions in recent years and last year trimmed $1.7 million from its operating budget.

Other local governments are doing the same. They have resorted to furloughs, outsourcing, layoffs, retirements, a school closing, cutbacks in services, mergers, and delays in capital projects in order to make ends meet. Some still had to dip into reserves to balance the budget. That's not a good sign.

Governments must shrink, just as many industries in the private sector have shrunk drastically since 2007.

But even as signs of recovery emerge, a recent audit cautions that the highest hurdles have yet to be crossed on Hilton Head. The audit cited two major obstacles looming for the town: the community will be built out in about 20 years, and state law limits the ability of local governments to raise property taxes. Under today's law, budget increases are limited to population growth and the rate of inflation.

Town manager Steve Riley warns that maintaining services and meeting demand for new services will become increasingly difficult.

Beaufort County Council is doing heavy lifting on the same topic. It is going through every service offered by the county with the challenge of deciding which are mandatory and which may not be.

Citizens must understand that everything they can dream up cannot be built or, more importantly, operated by the government in an era of shrinking revenue. There may be wiggle room in capital budgets, but that's not true for operating budgets. The public must understand that.

Even in a county blessed with high property values, governments cannot do everything people expect. Some hard decisions will be required, and the sooner they are made, and the sooner the public understands it, the better.

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