Handling a Structural Deficit as a Mayor
Matthew Chance
Research Paper 3
GOVT 327-D01
Professor Aaron Van Allen
December 9, 2020
Structural deficits are a huge economic issue in the United States that happens in every form of
government whether it is local, state, or federal. For this scenario I chose, to be the mayor of a city that
is facing a structural deficit of $100,000, with an annual town revenue of $1.2 million and outlays
topping $1.3 million. Deuteronomy 8:17-18 (NIV) says, “You may say to yourself, ‘My power and the
strength of my hands have produced this wealth for me.’ But remember the Lord your God, for it is he
who gives you the ability to produce wealth, and so confirms his covenant, which he swore to your
ancestors, as it is today.” This quote perfectly sums up that everything comes from the Lord and the
money given to the federal, state, and local governments is not ours. We are called to be wise stewards
of money, using it for needs but not to idolize this money because it is not everything in our lives.
The Need for a Strategic Planning Committee
The first thing I would do is create a strategic planning committee. Strategic planning is defined
as “an organizational management activity that is used to set priorities, focus energy and resources,
strengthen operations, ensure that employees and other stakeholders are working toward common
goals, establish agreement around intended outcomes/results, and assess and adjust the organization’s
direction in response to a changing environment.” This would be a vital organization that would help find
where funds should be spent, where they can be reduces, and types of new programs that could be built
to make sure this does not happen again. “Bryson (2004) provides a simple structure for the strategic
planning process by defining the ABC’s of strategic planning. According to Bryson, A is where you are, B is
where you want to be and C is how you get there. The vision, mission, and goals of the organization help
it move from A to B. Strategy formulation connects A to C and strategy implementation connects B to C”
(James V. Earle 2009). My strategic planning committee would look at what got us into a deficit, was the
funding spent correctly, steps we can take it get out of this deficit, ideas on how to gain new money to
get the budget ahead, and why this problem happened in the first place. Even though I say all of this, it
does not mean it would be an easy step to complete. I would need to find the right people for the job
that do not have any other agendas of their own. Creating a strategic planning committee would be
beneficial because outlines will be made to make sure that this type of deficit will not happen again.
Collective Bargain Agreement with Teacher’s Union
“Collective bargaining is a process through which management and labor (e.g., school
boards and educators) negotiate to reach agreements on working conditions such as salaries, hours
and benefits. Although on the surface this does not sound like a bad thing, the danger lies in the
details” (Association of Texas Professional Educators). During my previous election, the teacher’s
union helped me get elected so they are a vital part of my administration. With their CBA coming to a
end, a new one needs to be made while they are demanding a 1% raise. With my deficit going on,
this will only affect my deficit even more. There are two things that could be done to try and fix these
problem with the CBA. First, I would try to sit down with the CBA organizers and try to inform them
that a 1% raise would not be able to work because we would not be able to afford this within our
fiscal budget. I would explain that if a 1% raise happened then it would put the town into a deficit that
would affect further spending when it comes to education and the programs that are offered which in
turn would affect them. I would have to discuss a possible raise and show that a 0.50% raise would
not only benefit them but in turn it will benefit the city as well. If this tactic did not know then secondly,
I would try to put together a committee to map out the possible outcomes and scenarios would
happen for any type of raise happen within the new CBA. In my opinion, this would be the best
outcome because you will have all the facts out in front showing what will happen budget wise if a
new raise were put into place with a new CBA. Education is important but giving too much of a raise
would affect the city. I would have to find a solution that benefits both sides because the teacher’s
union did help get me elected to office.
Taxes
Another option to reduce the deficit would be to try and raise taxes to some level to make that
money back up. Raising taxes is never a good idea because it could cause your constituents will not like
having to pay more and they will voice their opinions and wonder why this tax would be happening.
“Another reason tax increases don’t reduce deficits is that they are harmful to economic growth,
employment levels, and wage growth. This growth slowdown ultimately means the actual revenue yield
from tax increases is significantly lower than the expected revenue yield” (Veronique de Rugy 2020). By
raising the taxes to change your tax deficit, you will be spending money to try and make that money back
up. In the end, you will not make that type of money needed to get out of the deficit that is happening in
the first place. All the taxes will do is cause people to ask questions about how a deficit could happen in
the first place. With this happening, people will not believe I am the right person for the to be the mayor.
Instead of taxes I would try to figure out what programs are being used and what programs are not being
used. If programs are found that are not in use anymore, I would either reduce the spending or cut the
spending entirely to see the returns that would happen with my deficit. This could be the way to help
make a dent in the deficit because with money coming back in from programs not being used should
help out a lot.
Education
In order to create a better economy within my town I would try to create a local college.
Education is a major way to create the correct skill sets that will be needed to create future jobs,
products, and future leaders that will know what they are doing. Creating a school would bring more
revenue to the city because it would bring people from different places who would buy supplies for
schools, tax revenue from the school, new people moving into the city and more jobs from the people
who graduated from the school. The first problem that would need to be done is finding the funding to
create this school. “First, raise a lot of money. Without a pile of cash on hand, you won’t be able to pay
faculty and staff, or buy land, buildings, and textbooks. Many universities—Vanderbilt, Stanford, Carnegie
Mellon—were started by moguls rich enough to pay the bills themselves. Others relied on foundations to
jumpstart their endowment: Olin College in Massachusetts, for example, draws its funding from the Olin
Foundation” (Christopher Beam 2007). Education is something that is needed within my town. I would
pitch this idea to my constituents to see what their ideas would be on this suggestion. I would also try to
secure funding from government to get the income needed. I would also go to different companies to
see if there could be an opportunity for sponsorship to get this idea off the ground. Adding a community
college or a university to the city would bring vital funding that would help out budget grow more and
more each year.
Unemployment
With the economy slowing down and the unemployment rate starting to slowly rise, I would
need to find some type of program or policy that would allow for new types of jobs to be created to fix
this problem. Creating a college would also fix this problem because you would be able hire people in
the city to do these types of jobs that are needed. Doing something like this would fix the
unemployment rate and would bring jobs back to the city. Creating new programs for jobs would allow
for more companies and employers to hire new people to fill these spots.
New Facility
I would create a few facility for a little while. I would want to create a college first to where people with
the right skill set would be hired to make this an effective thing. People with the right skill set could be
people who are architects, builders, employees, managers, board members, and people in the tech
sector. With these new skill sets from the community college; it would bring in the right revenue needed
to change the budget for years to come. This would be the right way to make sure that things are done
properly.
References
Beam, C. (2007, May 16). How do you start your own university? Retrieved December 18, 2020, from
https://slate.com/news-and-politics/2007/05/how-do-you-start-your-own-university.html
Collective bargaining, exclusive consultation and the right to work. (n.d.). Retrieved December 17, 2020,
from https://www.atpe.org/en/Advocacy/Issues/Collective-Bargaining
Earle, J. V. (2009). Development of a strategic planning process model.
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