City leaders have put off making difficult budget decisions they knew were coming. But now, with an $11 million gap in the 2014 city budget, they have no more time.
Fortunately, the proposal from the fiscal policy group convened by the mayor offers a reasonable mixture of budget cuts and increases in revenue to ensure a sustainable city budget for 2014 and moving forward.
Some council members may prefer to avoid raising taxes, but it will be impossible to maintain needed city services without them.
The city has lost $53 million in revenue to the tax caps since 2009. But city leaders held off on making any severe adjustments to the budget because the weak economy made tax increases unconscionable and the city’s strong cash reserves made delay reasonable.
The fiscal policy group, which includes some of the state’s most respected experts in local government finance, suggested a plan that reduces spending and increases taxes. The proposal for increasing taxes includes adopting a new property tax called a cumulative capital development fund and a new local option income tax.
The incoming revenue would go toward road construction and hiring additional firefighters and police officers. City officials have deferred road projects as a cost-cutting measure and both public safety departments are understaffed.
Council members Mitch Harper, R-4th, and Russ Jehl, R-2nd, have offered an alternative budget proposal that does not include adopting any new income taxes.
Some of the suggestions in the alternative plan are valuable, including setting an objective of maintaining a 7 percent cash balance and opening up a discussion about the appropriate level of debt for the city.
Harper and Jehl also deserve credit for sharing their proposal early enough in the budget process so that it could be given due consideration rather than revealing it at the eleventh hour.
But their proposal is not sustainable in the long term because it relies too heavily on finite Legacy Fund money to prop up the city’s general fund. The Legacy money was specifically earmarked for special projects that would have a lasting effect on the city.
It’s also questionable whether this use of Legacy dollars could win approval.
According to an agreement unanimously passed by City Council, the spending proposal would require six council votes and the mayor’s consent.
Not adopting the local income tax will make it impossible to maintain the services city residents have overwhelmingly said they want to keep.
