Politics is fun: the clash of candidates in campaigns, the pageantry of speeches and ribbon-cuttings, and the gossip about who did what to whom. Governance, on the other hand, can be dull: Few get excited about the back-office world of spreadsheets and green eyeshades, of non-recurring revenue, balanced budgets, bond ratings, and pension obligations.
Boring or not, though, this is the stuff that really matters. If you want to measure a city politician’s real success, look at the numbers — and by that measure, former Boston mayor Tom Menino’s tenure shines as an example for his successor, a point driven home by a just-issued report from the Boston Municipal Research Bureau, the independent business-funded watchdog.
Covering the last 11 years of the administration, the report is both an excavation of the past — including an effort to understand how Boston survived so remarkably well the Great Recession — and a set of guidelines for the future. The short answers: Don’t reach farther than your grasp. Don’t be afraid to say no. And build up reserves to help ride out the inevitable next recession.
Boston’s government today is a $2.6 billion operation. More than 80 percent of those funds come from just two sources: property tax and state aid. Both are inflexible. State law prohibits cities and towns from suddenly increasing property tax rates. Meanwhile, state aid is shrinking. Boston’s share, for example, went from $523 million in 2002 down to $403 million last year. Money, in other words, is tight.
So what are pols with grand plans to do? Play games. They can use non-recurring revenues (say from the sale of some city-owned property) to fund recurring expenses. They can increase borrowing, using debt to pay for constituent-pleasing new projects. They can underfund some obligations, deferring payments on employee pensions, for example. Or they can spend every last dollar, never building up a reserve. All of these dodges work, at least for the short term, but they create enormous perils for the future. Eventually, of course, someone has to pay.
Menino resisted those games. As the Bureau notes, during Menino’s tenure there was a general tendency to match recurring revenues with recurring expenditures. City policy was to keep debt service at no more than 7 percent of operating expenses; during tough times Boston would slow down borrowing for new projects. And when it created its annual budgets, it estimated revenues conservatively, meaning that expenses were also held in check. If revenues came in higher than expected — and often they did — they would be held in reserve, building up a rainy day fund. Indeed, the city’s discipline was such that bond rating agencies twice over the last decade increased its rating, meaning it could borrow more cheaply (which meant, as well, that it could actually spend those saved dollars on real projects rather than sending them to a bank). And the administration was disciplined as well in terms of managing pension liabilities; it’s on track to have them fully funded by 2025.
That’s not to say things were perfect. Personnel account for two-thirds of Boston’s spending. Although the number of employees declined by about 1,000 since 2002, city departments could have benefited from tougher scrutiny and wholesale review of their activities. In addition, the administration shied away from technologies (such as voicemail) and strategies (such as competing out services to private bidders) that could have saved even more. Union contract negotiations, particularly with the city’s teachers’ union, were chances to seek reforms —
Shortcomings notwithstanding however, the overall conclusion is that Menino did remarkably well by Boston. The puzzle is why. The greatest political pressure politicians face is to spend more, and it’s easy to give in, kicking the can down the road, figuring the problems they’re creating will be someone else’s to solve. Menino, I suspect, hoped from the first that he’d be mayor for a long while, meaning any problems he created would also be problems he’d have to solve