There’s no reason to think cities should work much differently. The biggest difference is the customers (citizens) are a good bit more vested because their largest investment is their home.

The budget is the city’s main policy document

It proportions spending on

• Revenue generation (i.e. tax collection and increasing the tax base),
• Customer satisfaction (votes for the politicians), and
• Cost reduction.

If a city cuts costs on the right things it lowers the tax rate. Finding new investment increases the tax base. Cutting costs and increasing the tax base allow a city to spend on things citizens enjoy (e.g. clean streets, libraries, convenient services etc.).

There do not appear to be strategic linkages between Trenton’s budget elements

In cities, as in businesses, the relationships between revenue, services and costs are complicated. Developing great policies and budgets requires thoughtful understanding and analysis of the interactions between citizens and businesses and each facet of the city. It’s rare to find this understanding in most companies so one can assume it’s at least as rare in city hall.

During the latest budget cycle there were no grand strategies that linked this year’s budget to the overall improvement in quality of life five years from now. In a business this is called long range planning. Trenton’s city council was given no explanation of how the 2008 budget would lead to lower taxes or specific improvements in attracting new residents or new business. The budget and Trenton’s future were not linked.

The current policy goal of Trenton’s budget is clear, spend more on police

ReinventTrenton.com has reviewed Trenton budgets over the years and has studied the 2008 budget in detail. Police spending has consistently increased while other departments have seen decline. This trend has continued to the point where the police take up 30% of our budget. Other than that little has changed in Trenton’s budget.

Despite the political rhetoric, unless the budget changes nothing else will

A status quo budget reflects a strategy of placating existing residents at the expense of attracting new ones.

The status quo is unsustainable.

• Trenton’s tax rate has increased every year for the last six years and will increase again next year.
• The population has decreased for the last 18 years.
• Per capita income is shrinking vs. the national average.
• In every measure available, Trenton is moving backwards in its ability to fund the police and fire protection Trentonians enjoy.

Budgets like organizations need to change.

• Stagnation is poison for a business.
• Business cycles change as does competition and technology.
• Leadership styles appropriate for fast growth are not appropriate for cost cutting.
• Rarely are public companies led by the same CEO for more than 5 or six years.

Cities need change too.

• Trenton has had only three mayors in the last 50 years.
• A Mayor adept at leading a city through racial strife may not be the best at adapting to new economic times.
• Even for supporters of the current mayor, it’s fair to ask whether new circumstances require new leadership.

Trenton hasn’t invested in strengthening the city

Of the entire $186,000,000 Trenton municipal budget,

• Only 3% (Housing and Economic Development, Inspections and a little bit of Culture) is allocated to attracting new investment.
• No money is allocated to cost cutting and no money dedicated to measuring the success of a turnaround.
• 97% percent of the budget is allocated to doing exactly the same things that have been done for the past six years.

You might ask what I recommend

That’s a good question. While, it’s impossible to recommend line-item budget changes without first hand knowledge of the inner workings of an organization I have provided general policy guidelines. Several ReinventTrenton.com articles address this – notably:

A Vision and Plan for Trenton

Modeling Trenton Dynamics

Go Trenton, Beat Clifton

The Case for Arts Investment

Look for a future ReinventTrenton article entitled Trenton’s Corporate Turnaround. In that article I’ll apply the best thinking on leading corporate turnarounds to the problem of leading Trenton out of its current troubles.

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