Beefier security swallows up cities' surpluses

Pinched by the mounting costs of security after Sept. 11, America's cities and counties are running out of money.

Even before the terrorist attacks led to countless hours of police overtime and hundreds of anthrax tests, the nationwide recession had left local governments looking at deficits for the first time in years. Now, the urgency of antiterrorism efforts has exacerbated that decline.

While no localities have reached a financial crisis, several have had to spend money - labeled for healthcare or hiring - on security. Moreover, if the recent safety measures have to be kept up indefinitely, experts say, cities and counties will soon be in the position of needing to significantly cut services or raise taxes to meet the growing shortfall.

"You can't increase spending while taking revenue hits, and you can't have this go on for six months without having to make some serious decisions," says Chris Hoene of the National League of Cities in Washington. "Cities are eating through [reserves] much more quickly than they thought."

Already, many cities and counties are making tough decisions as their carefully constructed budgets collapse.

• Faced with a projected deficit of $123 million, Chicago still decided to hire 25 new firefighters, and buy 18 new ambulances and 17 new firetrucks. At the same time, however, Mayor Richard Daley announced a hiring freeze after Sept. 11 for every position not related to public health or security, in addition to raising dog-license fees for the first time since 1871, among other things.

• After paying some $5,000 a day in police overtime, Fresno, Calif., recently declared a state of emergency so that the California Air National Guard could take responsibility for protecting its own barracks.

• Minnesota's Goodhue County had originally set aside $110,000 in overtime pay for those guarding the local nuclear power plant. With a deputy now assigned to the plant 24 hours a day - at a cost of $12,000 a week - that estimate has been exceeded in 2-1/2 months.

• Los Angeles has seen its police- and fire-department deficits double to more than $7 million since Sept. 11, and Mayor James Hahn has formed a task force to look at the economic impact of the terrorist attacks.

According to a survey by the National League of Cities late last month, 51 percent of American cities reported that they had increased their spending on security - up from 29 percent earlier in the month. But clearly, the timing has been bad for local governments.

As recently as a year ago, city coffers were gilded with the bounty of economic expansion, and surplus money was being laid aside for rainy days in the far-off future. Today, in many cities nationwide, those emergency troves of cash are almost depleted.

"A lot of cities had some resiliency built in," says Mr. Hoene. "They might have been able to minimize the hit, but with the way the economy has gone, it's going to be a lot tougher."

Like most others, the Bay Area town of Pleasanton, Calif., has a cushion. Its economic-uncertainty reserve was built up over the fat days of the late 1990s. But the city recently decided to spend some $400,000 over the next few months to protect its water supply. And while the city hasn't gotten an estimate of the cost yet, there is concern that false anthrax threats could leave the treasury bare - or close to it.

"Every time we get called to a scene, we're breaking out pretty expensive equipment that's really supposed to be used only once. There's a budgetary impact to that," says Nelson Fialho, assistant city manager. "Anything that is an impact takes away potentially from other services."

Other cities have already tallied the cost of following bioterrorist tips. Health officials in Milwaukee, for instance, said that as of late last week, they had received nearly 250 calls about suspected anthrax. While not all were investigated - one concerned citizen wanted the chalk lines on a cross-country course checked out - the tests and false alarms have cost the city health department an estimated $180,000.

The figure might not be huge in the overall city budget, but it is having an effect. "The health department is working against infant mortality, against lead poisoning, and it is very disruptive to these efforts," says Mayor John Norquist.

For now, many cities and counties are content to wait and see what comes next, in terms of both the economy and the war on terrorism. Most have not yet reached the point that they must raise taxes or cut services to pay for increased security.

Yet there is a sense that the time might not be far off. Even if terrorist attacks don't continue, few feel that localities will be able to return to the lower level of security that existed before Sept. 11. "There are some new realities to deal with," says Hoene.

With Congress handing out billions of dollars in aid to the corporate world, cities and counties are eager to get their own share to lessen the antiterrorism bill. If it doesn't come, however, officials worry that corners will be cut, either on defense or on the services that keep a city running.

"If they don't reimburse the costs, cities [may respond] by not doing the things they need to do to defend against a biological attack," says Mayor Norquist. "If [the federal officials are] going to make [security] demands on local government, they should help pay for some of it."