Tough Medicine: Anchorage mayor’s visit a budget-balancing lesson for city officials

Be simple, tough, and direct.

That was Anchorage Mayor Mark Begich’s budget-balancing message during his meeting on Tuesday with Tacoma Mayor Bill Baarsma and City Council members.

Though the occasion initially served as an opportunity to reach out to the Pacific Northwest region and explore opportunities to work together on future projects, a highlight of the mayor’s visit was a special meeting of the Economic Development Committee.

The topic?

Balancing city budgets.

Mayor Begich explained the budget gap he faced when he was sworn in to office on Jul. 1, 2003: a $33 million deficit projected for fiscal year 2004. It was the city’s most severe budget challenge in a generation.

“I had to get the house in order,” the mayor explained. “I delivered a tough message, got to the bottom of the issue, and then moved forward.”
Tough political decisions defined his strategy.

First, he went to labor unions and spoke frankly about the budget gap and a need to re-visit wage contracts. “I understood they were protecting their interests,” he explained, describing the initial resistance from union representatives, “but we needed to proceed together.”

When that didn’t work, the mayor stopped by a television station (on his way out of town for the weekend) to announce that the city would shut down Christmas week (except for police and fire departments), and workers would not receive paychecks.

The hard-ball strategy paid off. When he returned to work on Monday, union leaders were upset — but ready to negotiate.

Second, the mayor re-evaluated expensive “election contracts” from earlier administrations: contracts tied to employee longevity — not productivity. “It didn’t make sense to me that two people could do the same job and be equally productive, yet one person earned more than the other because he or she had been there longer,” he explained.

The mayor also introduced several ideas designed to head off future budget woes. The Cooperative Services Authority was created for ordering equipment and supplies across the municipality — rather than a department-by-department basis. Such a move saved the city money and allowed Anchorage to get “more bang for its buck,” according to the mayor. He also pushed to require new construction projects, such as a fire station or convention center, to include operation, maintenance, and personnel costs in the overall cost of each project.

The result? A balanced budget was achieved, and the mayor survived with a 68% approval rating.

“Overall, it was pretty tough medicine,” the mayor said. “No one wants to make tough decisions, but we had to do it.”