On Thursday, March 27th, while the FitzGerald administration and Lakewood city council neared finalization of cuts to a crisis budget, our national debt broke yet another record high at $9,412,362,408,343.83, an increase of approximately $18,232,806,983.13 from the preceding day, according to the National Treasury. Only months earlier, Ohio Governor Ted Strickland's office released an estimated budget shortfall of between $733 million and $1.9 billion for the 2008 fiscal year.

The chickens of de-industrialization and globalization, it seems, have come home to roost. The complex set of factors incubating this hatching has led to the debt financed insolvency of our federal government, budget deficits and subsequent spending cutbacks in states and municipalities throughout the nation. The Federal Government continues to finance each year's deficit budget through foreign and domestically held debt, thereby increasing inflation and eroding the value of the dollar. Our export deficit pales in comparison to our import surplus. As a nation, we are pressing ever deeper into a debt financed, deficit future. Public institutions are coming under increasing pressure to recognize and act upon this bleak knowledge. At the state and local levels, this pressure turns to mandate.

States and municipalities are forbidden from legislating deficit budgets. Thus, when the cost of producing public goods and services outstrips tax receipts at the state and local levels of government, cuts, though difficult, become a necessity.

Lakewood is not insulated from larger, global economic trends. Over the past several months, the FitzGerald administration and city council have worked diligently toward resolving Lakewood's budget crisis. Over a dozen public budget hearings have been held in which the allocation of funds for fiscal year 2008 have been trimmed from initial departmental requests. The depth of Lakewood's budget crisis became apparent during the dawn of the recently elected FitzGerald administration, which, upon taking office, immediately began an internal reassessment of the city's budgetary situation. The resulting estimate predicted a shortfall exceeding $4 million, over three times higher than that projected by the previous administration. According to FitzGerald, “It's far worse than the unions were told.”

FitzGerald understood that the unions might distrust his administration's figures, stating “I don't blame them for that.” With privatization as a last resort, the administration is intent on building trust with labor and council and renegotiating union contracts to fit the stark reality of reduced resources.

In a move toward greater transparency, FitzGerald contacted the State Auditor's Office for an outside assessment of his administration's figures. The State Auditor's Office offers in depth performance audits, which take up to nine months to complete under normal circumstances. With the state mandated budget approval date looming, this was not an option. By state law, municipalities must approve their 2008 budget by March 31. FitzGerald's administration worked with the State Auditor's Office to arrange for a fast-tracked performance audit that would ascertain the financial condition of the city. According to finance director Jennifer Pae, the administration “received the budget reasonableness estimate at a status meeting held by the State Auditor's Office on January 31, 2008” which revealed the city's projected shortfall to be within 2% of the state's.

With confidence in their figures, bargaining units re-opened contract negotiations with the administration, a process not yet completed.

For the past three months, the administration and council have convened a series of public budget hearings wherein department directors presented their budget and program rationale and the effects of reduced spending on their programs and services. Throughout this process, the administration and council examined the budget in the hope of achieving greater efficiency.

On March 31, the process drew to a close, with the final $400k deficit being closed through cuts to Human Services, Public Works, and Municipal Court. In addition, the anticipated end of year balance was reduced from $250k to a minimum of $150k . The particular distribution of those cuts was completed on Monday, March 31. Council agreed to remain open to furture amendments to the budget should labor negotiations require such action.

“For the first time in years Lakewood is spending less money than we're taking in,” states FitzGerald. The resulting document not only resolves the impeding deficit, it also re-directs resources to areas of urgent need. This, according to FitzGerald, is the remarkable thing. “Despite the worst fiscal crisis we've ever faced, we're not only spending less than we're taking in, but we've made additional investments in safety, technology and foreclosure properties.”

“I think I can say with a great deal of confidence that the fiscal train wreck that the city was headed for has been averted,” declared mayor Ed FitzGerald.