City of Lincoln
2008 Media Releases
Representatives of the Lincoln Electric System (LES) informed me on Tuesday of this week that they intend to seek City approval for an almost 12 percent increase in the charge for electricity, adding approximately $108 per year to the average residential bill. LES wants this change to take effect on September 1st of this year. The impact of this proposed increase to our City budget, to the individual family budget and to the budgets of all our businesses will be painful.
I simply cannot in good conscience quietly accept an increase of that magnitude in light of today’s economy.
I recently presented my final budget proposal to the City Council. In announcing my budget, I told this community that I believed that I could not ask Lincoln citizens for additional revenues until we had done everything in our power to ensure we were as efficient as possible. That’s why I made the hard call and cut over 130 jobs from the City budget in a little over a year. I have re-organized departments and reduced services. We have made those tough choices and hard cuts, and I owe it to this community and to those employees who lost their jobs with the city, to question the need and the scale of this huge proposed LES rate increase.
Government must be willing to sacrifice before we can ask the community to sacrifice and City government has. The Lincoln Electric System is a publicly controlled entity that has yet to demonstrate in this instance, to my satisfaction and to the community’s satisfaction, their commitment to fiscal restraint. They have asked for a huge rate increase without, to my knowledge, offering any significant corresponding cuts in expenses. This is unacceptable and under the circumstances I will veto this level of rate increase without evidence of necessary budget cuts by LES.
I told the community that our 130 job cuts and department reorganizations justified a fifteen-dollar annual revenue increase. By contrast LES is asking for over $105 more per year (seven times as much) without offering expenditure reductions in order to control their rates. As Mayor of Lincoln, I have a responsibility to my fellow citizens to ensure as much is demanded of the LES budget as the City budget.
So today, I am making two important announcements in response to the LES proposal:
First, I will not approve the 11.8 percent increase. If LES needs additional revenue, they must do as the Mayor and the City Council have done and show significant budget reductions. Only after I am satisfied that LES has made the appropriate sacrifices will I even consider accepting a rate increase approved by the LES Board.
Second, I can no longer support the proposed property tax increase. Government cannot operate in isolation from the other financial pressures faced by Lincoln families. The knowledge that other governmental entities are increasing their budgets and that LES is seeking an additional $108 per household completely changes how I would have approached this year’s budget process. I would not have asked for the $15 annual revenue increase had I been informed of the LES plan or had been notified that this was even a possibility in the near future. Unfortunately, LES did not provide this information to me until after I submitted my budget to the Council and to the public. I am deeply disappointed in that lack of communication.
After 130 job reductions and millions of dollars in program cuts, I cannot conscientiously cut more City services to our citizens. As I have said, I will not preside over a Lincoln in decline. Our quality of life is important. It is the reason that people choose to live and work in our community. It is why we are able to attract businesses to expand or to locate in our beautiful city.
An additional $1.5 million reduction in services – services originally proposed to be funded by increased tax revenues – is not acceptable. Police officers in schools, pools, library hours and an end to neighborhood blight are simply too important to us all to cut any deeper than we already have. We must stem the bleeding of our budget and preserve the greatness of our city.
Therefore, in light of this notification from LES, I will urge the City Council to work with me in developing a plan to withdraw the proposed one-penny property tax revenue increase and instead, utilize one-time funds to save those programs.
It is not a decision I come to lightly. I stand by my deep conviction that ending the structural imbalance between revenues and expenditures must be the ultimate solution to the City’s budget crisis. Unfortunately, under the current circumstances, it will not happen this year. I must express my disappointment that once again next year we will, in all probability, be faced with a structural imbalance in our budget, albeit on a reduced scale, because we have been forced to return to the use of one time funds.
The best and most logical place for our one-time funds is the stimulation of new jobs and new businesses. I still believe that my proposed Fast Forward Fund and the Home Owners Stimulus Plan are important pieces to our economic development future. But the LES rate increase has abruptly changed the equation. The Council and I will have to work together to find a solution that still promotes job growth, but also protects your family budget.
Leadership demands recognition and acceptance of changing circumstances and different needs. In the words of Abraham Lincoln, “The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew, and act anew.”