Auckland Council facing reality

The Herald reports:

Cutting back funding for park maintenance, reducing library hours and scrapping inorganic rubbish collections are among options being considered by a cash-strapped .

Its finances have reached crisis point where severe cuts are necessary in a black budget to put rates and debt back on an “affordable” and “sustainable” path. But families fear the proposals will leave the city’s youngsters worse off.

To rescue finances, slashing up to $2.8 billion of new spending is required, as well as stripping up to $486 million a year for each of the next 10 years.

The first overview of the new 10-year budget discussed by Mayor Len Brown, councillors and decision makers yesterday included the $2.86 billion City Rail Link, which has an enormous flow-on effect.

The more you spend on one item, the less you have elsewhere. It is elementary.

“We’ve been looking at a situation where on one hand we’ve got this ambitious programme but on the other hand we’ve got this constrained funding envelope.”

Welcome to fiscal reality.

The council has also identified parks and community services for cuts of up to $60 million a year with talk of closing “under utilised” halls, recreation centres and swimming pools. Fewer arts and culture festivals and events are under consideration.

The proposed cuts are on a scale never witnessed in Auckland before, and are certainly bigger than those of Auckland City Mayor John Banks’ razor gang of 2001, headed by former Finance Minister Sir William Birch.

Ratepayers should not be used as a never-ending source of increased revenue. Rates increases should be no more than inflation.

Under his first four budgets – based on the budgets and assumptions of the former councils – debt soared from $3.9 billion to $7.3 billion and households were hit with cumulative rates increases of up to 38 per cent.

The more debt you have, the greater the interest payments are.

Mr Brown has not ruled out breaking a key election promise to hold rates to no more than 2.5 per cent this term.

It will be his final term if he does. He may of course realise he won’t be re-elected regardless, so decide he has nothing to lose by breaking his promise.

However Councillors who vote for higher rates increases may face a challenge with re-election if they do.

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