Beige Book Report: Dallas
October 14, 1970
For this report, thirty-one city and county finance officers in the Eleventh District were surveyed concerning current and anticipated levels of government expenditures and the means of financing these expenditures. The officers surveyed reported: (1) Most governmental units had a substantial increase in 1970 expenditures over those in 1969, and anticipated additional increases in 1971; (2) Nearly three-fourths of the units had awarded a wage increase to their employees in 1970; (3) Only a few units had postponed capital issues in 1970—due to either legal interest rate ceilings or other reasons; (4) About half of the governmental units planned new capital issues to be sold within the next nine months; and (5) Over 70 percent of the units had participated in some type of federally funded project requiring matching or local funding responsibility in 1970.
With regard to 1970 expenditure levels (including both current and capital spending), the majority of officers reported a substantial increase (9 to 12 percent) in spending over the 1969 level, with about one-fifth reporting a spending increase in the neighborhood of 20 percent. A few of the smaller units reported no change with one city showing a substantial decline in expenditures due to the completion of a major capital spending program during 1969. Although many officers did not yet have preliminary expenditure estimates available for 1971, of those who did, the majority again foresaw an increase in spending of from 9 to 12 percent. Moreover, about one-fifth of those surveyed anticipated expenditures in 1971 to exceed 1970 levels by 20 percent or more. Two of the city officers noted that they expected over a 50-percent increase in expenditures in 1971 due to large capital spending programs planned for next year.
Nearly three-fourths of the officers surveyed reported that their units had awarded a wage increase sometime during 1970. Increases made ranged from 3 to 15 percent, most being about 5 percent. Several of the city officers mentioned that fire and police personnel were awarded wage increases from 2 to 4 percent higher than those for other employees. Some units had made across-the-board wage increases from $25 to $43 a month which resulted in a 5 percent or more increase—depending on individual pay levels. In addition, many officers reported that their units had improved fringe benefits substantially during the year. A few officers noted that their wage increase was not considered a "cost-of-living" increase, but was extended in order to remain competitive with other employers in their area. Finally, a number of the officers mentioned that they expected additional wage increases early next year.
Only five of the thirty-one officers reported having postponed any new capital issues during 1970. Of these five, two had postponed bond issues because voters had approved the issues with interest rate ceilings (4.5-5 percent) that were not competitive in 1970 markets. The other three officers mentioned that they had no legal rate ceilings, but had postponed the issues until a later date because of what they considered to be excessive interest rates prevailing in capital markets during the past year.
About half of the officers surveyed indicated that their governmental unit planned to sell new capital issues sometime in the coming nine months—many before the end of the year. A number of the other officers noted that some proposed bond issues had not yet been approved by the voters, but could possibly receive the necessary approval and be issued sometime before mid-1971.
Over 70 percent of the governmental units had participated in at least one federally funded project requiring some local funding responsibility during 1970. There was some difficulty in estimating funds expended on annual basis since there is some overlapping of fiscal and calendar years, and many of the projects are ongoing, requiring a number of years for completion. The majority of the projects involved matching funds (50-50) between federal and local governments; however, there were several projects that involved 60 to 70 percent federal money. A few of the officers surveyed mentioned that their units had made proposals for projects involving federal funds—with approval anticipated in the near future.