From the Bloomington Herald-Times:
While a budget like the city of Bloomington’s can seem muddled by pages and pages of line-item expenditures, a budget analyst like Indiana University professor John Mikesell sees only two numbers. There is how much a city spends, and there is how much a city can spend. Bloomington’s budget has remained in the black, with revenues outpacing expenditures by $4.9 million in 2012. However, projections outlined at Wednesday’s budget advance for the city council, from numbers put together by former controller Mike Trexler, show that the budget could be in the red by more than $3 million in 2017. Critics have wondered why Mayor Mark Kruzan’s policies of late have aligned less with the city’s present stability and more with potential gloom. Over the course of the past year, he has raised the possibility of adding fees on residents’ utility bills for trash pickup, primarily to bolster the budget, as well as the introduction of parking meters downtown, mainly a shift to force cars into the city’s garages but also a revenue raiser. That raises the question of whether Bloomington’s budget, as constructed, is sustainable. If you think like Kruzan and believe his last controller’s projections, it isn’t. The future is not only dependent on the city’s general fund, which pays for services residents depend on every day — police and fire protection and street cleaning crews, for example. The future of Bloomington, for a mayor who wants to have cash on hand to build a new fire station on the southeast side, or a fourth city parking garage, depends on an overflow of revenues into the city’s “rainy day fund.” Projected year-end general fund balances, without trash fees and other newly implemented savings added in, fall to zero in 2015 and 2016, with necessary additional funding coming from the rainy day fund. A big drain would be the city’s sanitation operation, which pulls about $1.2 million annually from the general fund. Forecasts show the city pillaging its cushion by more than $8 million from 2012 through 2016. At the end of the 2017 budget cycle, the remaining $400,000 from the rainy day fund will be used to offset a $3.5 million deficit. “They have discovered that the property tax ceilings are starting to bind, and, in this Great Recession, the individual income tax numbers of those likely to be enrolling are not going to sustain them if they try to continue spending as they have,” said Mikesell, editor-in-chief of Public Budgeting and Finance and a professor at IU’s School of Public and Environmental Affairs. “You have to make choices. What people want is often beyond the economic choices they should be making.” ... See the full article here:
http://www.heraldtimesonline.com/stories/2013/05/12/news.planning-for-the-future-requires-tough-choices.sto
