Under the guise of open public discussion, the City of Davenport is conducting a serious spin campaign. Last week's town-hall budget meeting was advertised as "an opportunity for the public to hear from city officials and staff about the operating and capital budgets of the city and an opportunity for public input on priorities for city services, infrastructure, and programs." And it was those things. But the primary agenda item seemed to be making the city look good.

The city's basic argument is that many factors, chief among them state law, tie its hands. As the city's Web site explains, "In addition to the state-imposed property-tax-levy limit ... two provisions in the Iowa Code further restrict the city's ability to generate sufficient tax revenues to cover on-going expenses." (The emphasis is mine.) Those two things are property-tax rollback provisions and the tying of "taxable value of residential property ... to the total assessed value of agricultural property in the state."

There's no denying the impact of these items. For example, in Fiscal Year 2001, residential property in Davenport was taxed at less than 55 percent of its assessed value, compared to more than 80 percent in Fiscal Year 1990. Residential rollback, City Administrator Craig Malin said at the meeting last week, has cost the city $127 million. "We are on more of a fixed income than people on fixed incomes," he said.

Fair enough. But those are givens; they shouldn't be used as excuses. (And it should be noted that bellyaching about revenue restrictions was not the way to win over a crowd that was complaining that taxes are too high.) What matters is not what the restrictions are but how the city deals with those limits.

The meeting started with budget basics - where the city's money comes from and where it goes. Charts compared Davenport's municipal-property-tax-rate with those of other Iowa cities, and showed how the city fares in relation to other communities in terms of nonunion government employees. Without fail, they painted Davenport in the most positive light possible.

After that, the people in attendance were divided into small groups and asked to tackle one area of the city budget: the General Fund, the Trust & Agency Fund, and the Capital Improvement Program. The first two groups were asked to come up with ways to either save $1 million or generate $1 million, and the latter group was asked to prioritize city capital-improvement projects.

Each exercise came with its own set of rules, reflecting some of the constraints the city has to deal with. For example, adding an employee-paid health-insurance premium would require that the city add an expense to the general fund, because (the rules explain) "due to the nature of collective bargaining ... if you take away some benefit [such as free health insurance] you must give it back in the form of a higher wage."

The exercises have their good points. Most importantly, input from citizens might generate ideas that city leaders and bureaucrats hadn't thought of. The discussions also put city officials in touch with the citizens, albeit a very small percentage of them. And they help the public understand the difficult work of crafting a government budget.

But these discussions cloud the issues, and ignore some pretty basic politics.

Take the case of the city's Trust & Agency Fund, which pays for employee benefits. Citizens are rightly upset when they realize that city employees contribute no money to premiums for health insurance, and that their co-payments for prescription drugs and office visits are laughably low. And the public is right to get even more upset when they learn that these benefits are paid for through property taxes, and that the property-tax levy for those items has no limit. The portion of your city property taxes that pays for employee benefits could, theoretically, double next year, and there's nothing you could do to stop it.

So the city falls back on the excuses that benefits are negotiated with employee unions, and that it has no control over the property-tax levy for the Trust & Agency Fund. In addition, the city puts up a chart that shows there are several other cities in Iowa in which employees pay no health-insurance premiums.

I won't dispute those facts, but I question their meaning. Negotiation is a two-party process, and if the city makes it a priority to get employees to contribute to their health-insurance costs, surely it can. And on the issue of free health insurance being somewhat common in Iowa, I say: So what? That doesn't make it economically sound.

What's missing from the discussion is the fact that the city has little if any incentive to reduce costs in the Trust & Agency Fund. Employee benefits don't affect the discretionary city budget, so why bother?

The city has actually done more to burden taxpayers with its handling of employee benefits and the Trust & Agency Fund. Instead of giving employees higher salaries or wages, the city continued to give them free health insurance; workers pay no premiums on a gold-plated plan.

The reasoning is simple. Wages and salaries come out of the general fund, so increases in those would have a major impact on the way the city spends its money. Shifting the money to Trust & Agency puts the burden squarely on taxpayers, and the city council doesn't have to be bothered.

But that's not the type of talk you're likely to hear at a town-hall budget meeting, because it doesn't reflect well on the city.

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