Being a day late on a blog is like being late a few weeks in the rest of the world, but I wanted to take some time to review Mayor Karl Dean's State of Metro address. There has been some strong criticism in the commentary.
It's important to look at what the Mayor did and didn't say about the budget issues that Metro faces. He summarizes a whole news cycle in saying, "It's no secret that we have some financial challenges as we move ahead." Dean knows that his audience reads the paper and he's not going to rehash all the details of the problem. The task is to put together a budget that "reflects our city's priorities," and he believes he has done so.
The substantive question is not whether Dean has fairly given notice about the budget issue. The question is whether his solution is merely "smart fiscal management." I found in Dean's speech a three-fold approach--fiscal management, a change in the "business cycle," and economic development.
The Mayor didn't unpack the first two. But fiscal management would include the cuts we've heard about and tough expense control. It includes a variety of practices such as making the community enhancement grant process competitive and accountable. As for the change in the business cycle, it is too early to know how long the recession or pre-recession will last and when things will turn around. There is no doubt that the average American is hurting. Growth is likely to be weak through the end of year, but Wachovia analysts are saying the odds of recession are now about 45% as opposed to the 90% they predicted in April. So while he has no control over the business cycle, Dean's comments aren't out of place since the economy will turn around, hopefully sooner than we expect.
Economic development in Dean's view involves several pieces. The investment in schools and attention to the dropout rate are part of the solution: "It's simple math--more kids graduating would have a huge economic impact on our city." Dean mentions partnering with the Chamber to "recruit new companies to our city" and working with "small business owners and entrepreneurs." He also devotes a couple of paragraphs to what some call the creative class, describing them as "full of intellectual capital." I think if he were to be faulted, it would not be on the approach, but on the lack of specifics. Specifics are clear with respect to the dropout rate, but they are not as clear in terms of attracting new business and nurturing a climate conducive to creative types, at least not in the text of the speech.
The Mayor gives a nod to the critics of big government by noting that his budget includes "no new property taxes," a position which draws fire as a mistake in the Nashville Scene piece cited above. But how could any official--even the gutsiest--propose an increase in property taxes when foreclosures are rising around the area? The likelihood of avoiding recession may be higher now and that will eventually work in the city's favor, but it is not yet an experienced reality for Metro residents. Until it is, Dean has no good options for increased revenue.
"Good"--there's that word. "Ladies and gentlemen, as we approach the mid-point of 2008, the state of Metro is good." The budget situation is not good and the dropout rate is not good. What does he mean? Unlike some spectators, I took "good" as a fairly mild description. It certainly contrasts with the President's description of the state of the union as "strong" or "has never been stronger." I think it was an attempt to avoid exaggeration. He lists a number of features of the city that are good. He may also ironically be borrowing a page from Bob Clement via Jim Collins when he closes by saying, "The destination our city arrives at will be great." He acknowledges that the "path we take will not be easy." Good becomes a great deal more understandable in that context.