New Dem of the Week: Mark Begich
Mayor of Anchorage, Alaska
When Anchorage Mayor Mark Begich took the helm of Alaska's largest city -- its 260,000 residents represent 41 percent of the state's total population -- he also inherited a financial mess. As he entered office last July, Begich was handed a $5 million shortfall in the city's current budget year. Worse still were next year's numbers: a projected $33 million gap between revenue and expenditures, representing 10 percent of the city's entire budget. With cuts in state funds, a cap on property taxes, and soaring expenses from scheduled benefit increases for municipal employees, Begich faced a daunting challenge.
So far, Begich has consistently found solutions to Anchorage's problems by turning to the principles of fiscal discipline. He has made city government leaner by thinning out the bureaucracy and stressing accountability. Many core services are now provided to residents at lower costs. Begich has removed loopholes that limited the city's potential revenue, eliminated certain non-essential programs, and even sought funds from outside groups and governments. And he has called on residents, as well, asking them to take part in the budgeting process by highlighting their priorities and evaluating their needs.
"The Municipality must move past cutting out a few frills," Begich announced last fall as he set out to balance the budget. "The challenge is unprecedented and will require unprecedented and painful decisions so that we can balance our budget. We're all in this together and the best solution is one in which everyone participates."
Begich's first step didn't even take him beyond his office doors. He pledged to reorganize city hall's executive branch, making it more efficient and able to respond to residents' changing needs. Begich consolidated the city agencies into three streamlined groupings rather than the overlapping five that Anchorage previously used. Now a Municipal Manager coordinates the traditional city operations, while the new Chief Fiscal Officer consolidates the functions of the Treasury and Finance offices. A new office of Economic and Community Development works to assist development and create a business-friendly environment. Together the reorganization yields annual savings of almost a half million dollars.
Meanwhile, the city has also launched an initiative to encourage citizens and businesses who owe the city $17 million in delinquent fines and fees to pay up. A new website allows people to check how much they owe and pay immediately online. Officials felt that with new attention paid toward collecting what is owed, the city can take another step to plugging their budget's huge gap without slashing any crucial services.
Nevertheless, some cuts still had to be made. Begich asked each department to find 17 percent of their expenses that could be cut and present methods for eliminating redundant operations. In the final budget approved earlier this month by the Anchorage Assembly, Begich eliminated 100 positions. Fortunately, two-thirds were not currently filled and did not require layoffs.
The final $301 million budget marks the end of the city's past reliance on one-time funds to patch holes and balance the budget. The practice had maintained a debilitating structural deficit that kept the city digging out of the same hole year after year. Begich says the city did the right thing in using what he calls "the duct tape approach." Anchorage has dealt with its fiscal mess in much the same way you might remove a strip of tape from your skin: quickly and completely. "The pain is sharp and immediate," Begich said, "but there is time to heal in the future."
Begich, 41, is the first Mayor of Anchorage to be born and raised in the city. For 10 years he held office as a member of the Anchorage Assembly, and was elected chair by his peers three times. As an elected official, a board member for numerous local foundations, and a successful business owner for nearly two decades, Begich has consistently worked to help Anchorage grow and create opportunity for its residents.
Now that the municipal government finally has a clean bill of health, Begich hopes he can focus on supporting and growing the city's economy. Anchorage has already received both federal and private sector funding to transform the city's Mountain View neighborhood into a thriving arts and cultural district. And officials are also exploring options such as expanding the convention center, developing a new year-round resort complex, and even supporting an International Finance Center that would take advantage of the city's unique time zone and location to more easily tap foreign markets.
Ultimately, for Begich, balancing the budget wasn't an end in itself. Rather, a solvent government is the first step in creating the conditions and opportunity for significant economic growth across the municipality's 1,900 square miles.