[scoofy]

When you are looking at your city budget... you're probably looking at cash-based accounting:

https://www.investopedia.com/terms/c/cashaccounting.asp

This looks at current costs. The school is a cost every year, so every year that cost shows up on the budget. The problem is that road/water/sewer maintenance often doesn't show up on these budgets because these systems are usually built all at once. Because of this they usually also need to be replaced all at once. To see those costs before they happen, you need to use accrual accounting:

https://www.investopedia.com/terms/a/accrualaccounting.asp

The entire message from Strong Towns is exactly that because cities often use cash accounting instead of accrual accounting in their budgetary processes these lingering issues of deferred maintenance don't show up until they do, and when they do, those costs will simply be too large for the city to cover without very politically unpopular interventions.

[ndriscoll]

Capital improvements don't need to be paid all at once; that's what financing is for. And debt service does appear on budgets. In any case, why are we to believe that e.g. $1B in maintenance that's been deferred for decades is "the" problem when the school budget is $500M/year?

[scoofy]

You’re making an argument about school budgets being too high. That’s fine. I’m arguing that, our school budgets are set, in large part, by our available resources. Viewing our resources from a long run perspective helps us set our current budgets.

If we cut the school budget only when we need to repave roads, we are playing fast and loose with our children’s future. When we set our budgets to be sustainable, we don’t rug pull parents who are trying to build a life in our cities.

[Spooky23]

That’s absolutely untrue. The only reason companies track depreciation as they do is because it allows them to defer taxation. Public works projects are not paid out of current cash.

Strong Towns makes good arguments about certain things and are critical in a reasonable way of how civil engineering organizations rate the need for more civil engineering works. But the budget discussion makes zero sense.

The biggest expenses for county, city, town, village government are: schools, police & fire, Medicaid share in states that do that, and employee retirement and health. A small/midsize city spends 60% of its budget on police.

Capital projects are capitalized with bonds. Governments have the lowest bond expenses due to tax exemptions. Roadwork is not done in a cash basis. It’s bonded for 10-30 years depending on the job.

[scoofy]

Yes, the problem is that our cities are already leveraged up to their eyeballs. At some point, the actual humans buying those bonds start becoming skeptical of the city’s ability to pay them back.

LA currently has about a billion dollars of outstanding general obligation bonds (edit: but that does not include all their future liabilities). They're still rated AA, but I presume that is because the credit writing agencies understand how many untapped revenue streams LA has, but again, those will require unpalatable political change. You can’t keep refinancing forever.

Philadelphia, Miami, and Chicago are getting close to junk bond status, and when that happens, the option to refinance starts evaporating very quickly.

[danudey]

So you get 40 years of "sewers cost us almost nothing to maintain woo" and then five years of "sewer maintenance is costing us hundreds of millions of dollars this year".