By S.D. Plissken | May 10, 2019
Technically-inclined eccentrics of yore spent lots of time attempting to “square the circle.” Those not engaged in this busied themselves instead in inventing “perpetual motion” machines. Both were known (for different reasons) even then to be impossible pursuits. (The modern equivalent is faster-than-light (FTL) travel).
Last year’s Board of Selectmen (BOS) were chugging along in their usual rut of increasing the Town budget at more than twice the rate of inflation. At the very last minute – which is a problem in itself, both a management and a planning problem – they received the astounding news that employee medical insurance costs would rise.
And that was how they counted up last year’s proposed budget: entirely predictable medical insurance increases added to an already unsustainable budget. (Mr. Brown recently termed this “prudential management”).
Milton’s voters rejected that proposed budget in favor of using the prior year’s budget instead. In this case, the previously-approved budget, which was itself a travesty, is termed the “default” budget.
The Board of Selectmen are not required, when working under a default budget, to spend the default budget money in exactly the same way as they did in the prior year. They can reallocate money from one budget category to another as they see fit. They are limited only in spending no more than the default budget’s smaller amount of money.
It is a sort of “closed” system. If they choose to allocate more money to some budget category, they must necessarily allocate less money to some other budget category or categories.
This BOS is now two months into its year in office. (One-sixth of their time has elapsed). For those of you that have experienced the workaday world in the private sector, you might expect to see certain things happening.
First, management would seek to limit the damage. They would announce immediately a hiring freeze. Hopefully, there might be vacancies, which would have to remain vacant, at least until the situation could be carefully analyzed. It might even be that layoffs would be still necessary. Or that layoffs in one area might be needed in order to hire in another.
Raises, if there were to be any at all, would be severely limited if not entirely out of the question. It might be that some might get them, while others did not. They would certainly be smaller than in other years.
Capital expenses might be deferred. They might be suspended, have their timelines extended, or perhaps be cancelled entirely.
Those are all costs within management’s control. What of costs beyond their control, such as increases in medical insurance rates? Well, frankly, there would be fewer employee medical expenses if there were fewer employees. Thus the hiring and pay-raise freezes. Should those be insufficient, then something else – some equal cost elsewhere in the budget – would have to be cut instead.
And there it is. Under a fixed budget, within which some costs are rising, other costs must fall.
Of course, as when turning a ship or other large vehicle, acting promptly allows for a gentler change.
How is our BOS prudentially managing affairs? They have filled four vacancies in as many meetings. They have increased the mileage reimbursement. (There was no requirement that they do so). They are talking of taking on new membership dues. And so on.
There has been no mention of any corresponding cuts in other budget categories. No workshops devoted to reallocating the default budget monies. No sign that they are not just carried along by events.
Back in the time of Squaring the Circle and Perpetual Motion machines, people believed also in “trick” horses and “learned” pigs. Of course, we know now that those creatures were not actually doing any calculations or making any choices, but simply responding to prompts.
Wikipedia. (2019, February 9). Clever Hans. Retrieved from en.wikipedia.org/wiki/Clever_Hans
Wikipedia. (2017, September 18). Learned Pig. Retrieved from en.wikipedia.org/wiki/Learned_pig
Wikipedia. (2019, March 22). Perpetual Motion. Retrieved from en.wikipedia.org/wiki/Perpetual_motion
Wikipedia. (2019, April 22). Squaring the Circle. Retrieved from en.wikipedia.org/wiki/Squaring_the_circle