WBEZ | Budgets http://www.wbez.org/tags/budgets Latest from WBEZ Chicago Public Radio en Atlanta Mayor Kasim Reed offers advice to Mayor-elect Rahm Emanuel http://www.wbez.org/blog/best-game-town/2011-03-04/atlanta-mayor-kasim-reed-offers-advice-mayor-elect-rahm-emanuel-83341 <img typeof="foaf:Image" src="http://llnw.wbez.org/Atlanta Mayor Kasim Reed_Getty_Rick Diamond.JPG" alt="" /><p><p style="text-align: center;"><img src="http://llnw.wbez.org/blog/insert-image/2011-March/2011-03-04/Atlanta Mayor Kasim Reed_Getty_Rick Diamond.JPG" title="" alt="" style="width: 483px; height: 316px;" /></p><p style="text-align: left;">With many cities and states across the nation facing serious budget deficits and pension crises, Atlanta stands out as an exception to the rule.&nbsp; Since taking office 13 months ago, Atlanta Mayor Kasim Reed has balanced the city's budget, hired more police officers, restructured city services, and increased the city's reserve fund.&nbsp;</p><p style="text-align: left;">The Howard University-educated lawyer visited Chicago on&nbsp;Friday as part of an event sponsored by the Northwestern University Law School.&nbsp;&nbsp; As Mayor of Atlanta, Reed leads the country's ninth largest metropolitan area, one of the fastest growing in the nation.&nbsp; It's also home to major Fortune 500 companies and the world's busiest airport.</p><p style="text-align: left;">During our conversation, we talked about the challenges facing cities today, including Chicago, and asked him what advice he'd give to Chicago's mayor-elect Rahm Emanuel.</p><p style="text-align: left;">Here's an excerpt of our conversation:</p><p><strong>SE:&nbsp; Here we are in the midst of a national conversation about budget crises, about pension problems and as I look at what you've done in the first year in office, you've balanced the budget, increased reserves, and hired more police officers.&nbsp; You've been able to do a lot of things that a lot of mayors say they have no way of doing right now. So, what's the path that you've been able to take that other cities haven't?</strong></p><p>KR:&nbsp; We're investing in areas that generate the biggest yield and we're cutting in areas where I&nbsp;believe the city should not be.&nbsp; The City of&nbsp;Atlanta has more than 7,500 employees, so I don't think it's acceptable to tell people that you can't have an appropriate level of public safety if you have 7,500 employees. &nbsp;It probably means that you need to come out of some other spaces, which is what we did, reform some other areas, reduce costs in other areas, so that you can invest. &nbsp;We finished the fiscal year 2010 with about $16 million in excess cash because of a series of reforms that we put in place to manage our budget better.&nbsp;&nbsp;That helped us gain confidence with the City Council to make these critical investments.&nbsp; And not only have we improved the balance sheet and our fiscal performance, our services are fundamentally changing.&nbsp;&nbsp;</p><p><strong>SE:&nbsp; But help me understand the financial piece of this. &nbsp;When you talk with a lot of political leaders, they'll tell you that the fixed costs of govermnent - from labor costs to health care to pensions - are very hard to change.&nbsp; So how have you been able to create the efficiencies you're talking about?&nbsp; </strong></p><p>KR:&nbsp; Well, that means you have a &quot;will&quot; problem.&nbsp; It really does.&nbsp; You know what to do. And in our instance, while we made these other investments, we did eliminate about 125 positions. &nbsp;That generated some of the cash. &nbsp;We implemented a series of pension reforms, which quite candidly generated the cash to be able to improve police salaries, fire salaries, and provide bonuses to city employees learning less than $75,000.&nbsp; So we did hard things and we shared the benefits of that work with employees.&nbsp;&nbsp;</p><p>You have to invest in areas that people are going to see and feel.&nbsp; If you are a forward thinking elected official, a person who really wants to do transformational work, you've really got to care about the basic customer experience and you have to have the will to do what's required.&nbsp;</p><p><strong>SE:&nbsp; You make this sound easy.</strong></p><p>KR:&nbsp; No, I don't mean to do that. It's actually very hard, but I do believe that will is the issue. You know what the problems are facing cities. I know what they are. They are in multiple public documents, they have been researched -</p><p><strong>SE:&nbsp; We could fill this room with white papers on urban issues today -<br /></strong></p><p>KR:&nbsp; Exactly. &nbsp;They have been well researched and what happens is when you go to execute the things the document said, you meet a friction that you're either prepared to deal with or you're not prepared to deal with.</p><p>SE:&nbsp; <strong>Here in Chicago we've just elected a new mayor who will take office in&nbsp;May.&nbsp; Among the challenges he will face is an estimated $600 million dollar budget deficit and growing unfunded pension liabilities.&nbsp; What advice would you give to&nbsp; Mayor-elect Rahm Emanuel about how to approach these things?</strong></p><p>KR:&nbsp; Overcommunicate.&nbsp; I've given 180 speeches since I've been mayor.&nbsp; So, you have to constantly explain what you're doing in every format and it helps get you through. It's not enough that you're in the office reviewing data that makes sense. You've gotta be willing to go into living rooms, barbershops, [and] neighborhood meetings to the point that you sound like a broken record and explain to people wherever they want to be explained to.</p><p>You gotta keep explaining it in real time and you have to put yourself in a forum where the person says &quot;Hey, I saw that guy. I saw them stand up somewhere for 30 or 40 minutes and be questioned directly.&quot; That's the world we're in. People like access to information, they like to see, touch and feel people, and personal contact is how you win the day. If you go out and do a bunch of hard things and don't overcommunicate, you're going to feel a backlash that comes from a lack of understanding.&nbsp; If you're doing the right thing, sit there in the living room for two or three hours and explain it.</p><p><strong>SE:&nbsp; Leaving aside financial issues for a moment, what do you think is the biggest problem facing American cities today?&nbsp; </strong></p><p>KR:&nbsp; The biggest problem facing American cities is the challenge that we have with educating the next generation of young people to fill them. &nbsp;We have cities that have significant populations that are coming into the city that are not well educated, so that is going to tell you what the future of your city is looking like.&nbsp; I mean if you have a population of young people where 50 percent of them are dropping out and you know that a person who drops out of high school has a significantly increased possibility of becoming a felon, that can't be the pipeline for your community and assume it maintain itself.&nbsp; You risk reversing the trend toward urbanization if you continue to poor generations upon generations of people into the city who are unprepared.&nbsp; And to reverse that, we're gonna need to fix this in a more radical way than we are now.</p><p><strong>SE:&nbsp; I don't mean to pitch this as a Atlanta-Chicago competition, but as you well know, there are cities that need to attract new businesses, new industries and prominent new conventions. So what's the sales pitch you make when you're sitting across the table from business leaders that would convince them to come to Atlanta as opposed to any other city?</strong></p><p>KR:&nbsp; Well, first of all, I love Chicago, so I want to say that.&nbsp;&nbsp;It's one of my favorite cities and a leading city in the world.&nbsp; When I&nbsp;talk about Atlanta, I&nbsp;talk about the fact that we have the busiest airport on the Planet Earth. I&nbsp;handles 90 million passengers per year and you can get to 80 percent of the population in two hours or less and 84 international destinations.&nbsp;</p><p>My goal is to make Atlanta the logistics hub for the western hemisphere, which is why I'm working to deepen the port in Savannah.&nbsp; We have the fastest growing port on the eastern seabord, the fourth largest port in the United States.&nbsp;</p><p>Our job - and my job as mayor -&nbsp; is to be number one among southeastern cities because we're moving to a world where you're going to have mega regions. So, you will have a Chicago that is the center of the midwestern region, New York will maintain its dominance, and my view is that Atlanta will be the dominant force of the southeast.&nbsp; You're really going to have about eight or ten mega regions that will really determine the flow and growth of GDP in the United States.</p><p><strong>SE:&nbsp; I want to close by referencing a piece that was posted on The&nbsp;Hill, the DC-based blog, last week. &nbsp;The title is &quot;Frustrated mayors hope Rahm Emanuel will have Obama's ear&quot;. You're quoted in this talking about the way in which Rahm Emanuel can help other mayors in cities around the nation. &nbsp;What role can he play in the larger conversation around cities?</strong></p><p>KR:&nbsp; Well, being a mayor is where hope meets the street.&nbsp; So having someone who has a direct relationship - a deeply personal relationship with the President of the United States - and who was the supervisor of most of the staff in the White House - is going to be very helpful for many mayors across America just to be sure their case is heard. &nbsp;</p><p>And the real concern that I hear from mayors is &quot;Is the experience we're going through real-time being heard?&quot; &nbsp;States have a very powerful lobby.&nbsp; Governors are very powerful. &nbsp;But the fact of the matter is that 80 percent of the nation's GDP occurs in cities.&nbsp;</p><p>So cities, in my mind, are the more appropriate constituency for the President of the United States, because if you want to encourage economic productivity to deal with the high unemployment rate, you really gotta have a deeper concentration on the cities.&nbsp; And there still is a problem with federal support and federal largesse really reaching cities and that is something the President has to figure out and break through. I think that Mayor-elect Emanuel will play a significant role in making that case to the White House.</p><p><em>Correction:&nbsp; An earlier version of this story misstated Atlanta's population rank.&nbsp; It's home to the ninth largest metropolitan area, not the ninth largest city.</em></p></p> Fri, 04 Mar 2011 16:47:00 -0600 http://www.wbez.org/blog/best-game-town/2011-03-04/atlanta-mayor-kasim-reed-offers-advice-mayor-elect-rahm-emanuel-83341 Q&amp;A: Helping your family deal with the recession http://www.wbez.org/ssargent/2009/04/qa-helping-your-family-deal-with-the-recession/7316 <p>When it comes to making money-conscious decisions for your kids, the picture might not always be black and white: Should I start saving for college now? How can I plan for their future when mine is so unsure? What do I tell them about the recession? Michael McAuliffe, president of <a href="http://www.familycreditmanagement.org/" target="_blank">Family Credit Management</a>, has recommendations for how to get your family through this tough time. McAuliffe, a former branch manager for a national credit counseling agency, oversees all operations at FCM, which offers pre-purchase and foreclosure avoidance and provides credit counseling and debt management plans. <strong>1. For parents who are tight on funds, what is your recommendation for how they can start to save for their kids' college tuition?</strong> The first thing that needs to be done is to make sure your spending is under control. (We have a great booklet called "100 Small Ways to Save BIG!" which most families can use to find areas to save from their monthly spending.) Then you need to look at your age and how prepared you are for retirement. The old saying is that you can't borrow for retirement. If you are not saving for retirement, start now. If you can start to put some money away you may want to look at the College Illinois program which is a pre-payed tuition plan. I did this for my two girls and am glad I did. At this point I like to tell people about the economic theory of Opportunity Cost, which basically means every dollar spent cannot be put towards anything else. Spending $5 per day on coffee is $1,800 per year that cannot be put towards your stated goals like saving for college. The real decision is, what are your actual priorities? It's important to not just talk the talk, but walk the walk. <strong>2. When is a good time to start a Roth IRA for my kids? Is this something you recommend?</strong> This question is beyond my expertise, so I asked our company CPA who responded with: "A few general details, The child must have taxable compensation (i.e. W2 income not just interest/dividends) and the contribution cannot exceed that compensation amount for the year. Given that limitation, whether or not the parents should gift their money to fund their child's Roth IRA depends on the parents' overall financial plan, goals, cash flow, etc." <strong>3. Should we be talking to our kids about our financial difficulties? And if so, how do we broach the subject?</strong> Yes, but make sure you don't tell your children anything you do not want the neighborhood to know. Kids are hearing the bad economic news on TV and can tell when there is stress in the household. Make conversations age appropriate and try to alleviate any fears they may have. Allow them to ask questions and try to give honest answers. Let them know they are loved and the family has contingency plans to deal with and problems that may arise and there nothing for them to worry about. If changes are going to be taking place, let them know most people in the country are making changes to their spending and finances and your family is no different. Some changes may be made and everyone in the family needs to understand. It should be made a family project to figure out ways money can be saved, i.e. cancelling cable TV. <strong>4. What is your best recommendation or method for teaching kids about money, savings, credit especially with things the way they are?</strong> First make sure they understand where money comes from and how hard it is to obtain, but easy to spend. Make sure they are aware of the benefits of compound interest on savings accounts but the dangers of interest when it comes to taking on debt. Also make sure you are being a good example with how you are handling your money. No credit card debt, no home equity loans, and NEVER a Pay Day Loan. Only buy what you can afford and teach your kids that they cannot have everything. This will help them to understand realistically how things work. It is an important lesson in life. If they have income or get an allowance, open a savings account for them and encourage them to put away for long term goals (for kids, this may be during the summer). <strong>5. I was going to get my teenager a credit card, but now I'm not so sure. Is a credit card a good lesson in managing credit or a disaster waiting to happen?</strong> You never want to co-sign a loan for anyone...ever. This is for many many reasons. You may want to add your child as an authorized user on your credit card. This can help them establish credit (as long as you are not over limit or delinquent on any payments now or in the future in which case it would hurt their credit.) Also, you need to have complete trust in them as they will have the ability to charge this account up and their spending could get out of control.</p> Fri, 17 Apr 2009 02:59:00 -0500 http://www.wbez.org/ssargent/2009/04/qa-helping-your-family-deal-with-the-recession/7316