Taxes Up, Services Down
Dallas was not exactly ground zero in the mid-2000s real estate boom and bust. Outside of a few isolated neighborhoods, prices never rose very much. And outside of a few new developments on the suburban fringe, oversupply was never much of a problem. It was as if the city were splendidly isolated from the problems of the rest of the country.
So, when I went to visit my mother at her house in Dallas, I was a little surprised to see her trash bin overflowing.
"They only pick up the trash once per week now," she told me, shaking her head.
The city of Dallas, in an attempt to rein in costs, has cut its garbage collection services in half. Of course, they have not cut the fees charged to homeowners by a single red cent.
This is not technically a tax hike. But effectively, it is the same thing. Homeowners are paying more for a given level of service. And I expect this trend to be the norm at all levels of government.
I've written about this for years. The "solution" for the government budget and debt crisis is some combination of lower services and higher taxes. It's as true for Social Security and Medicare as it is for Dallas trash collection. We will all be paying more to all levels of government and getting less in return.
It doesn't make for happy taxpayers and voters, of course. But there is little alternative. "Cutting spending" sounds like a better alternative than raising taxes or cutting service, but how do you cut spending on something like Social Security? These are contractual obligations, and millions of seniors depend on it.
Don't get me wrong, there is plenty of government waste that can be cut. But one man's government waste is another's pet cause.
And it gets worse at the local level. Everyone is "for" cutting government spending in the abstract. But what if that means that your favorite local park has to be closed? Or that you have to store a week's worth of rotting trash in the baking Texas sun?
I have no solution to this problem because there is no solution. We could take to the streets and protest like the Greeks are doing over that country's proposed austerity measures, but that would be no more effective than English King Canute's attempt to command the tides.
Perhaps the only advice I can give is to prepare to fight hard for your piece of what promises to be a shrinking pie for the next several years.
Charles Lewis Sizemore, CFA
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