Our Next Budget
Excerpt from Justin's December Newsletter
The most important decision the Council makes is one that it makes annually: the adoption of our budget. The budget is where the Council translates the values of our community into numbers on a spreadsheet. It's the most basic function of governing.
While our budget is not adopted until early May, the Council formally begins this process in the Fall with the adoption of guidance for the City Manager. This guidance provides direction to the Manager as he works to prepare both the Operating Budget and the Capital Improvement Program.
The detail of the guidance varies from year to year, shaped by the circumstances facing the Council.
During last year's budget the Council devoted a significant portion of new tax revenue to address the City's deteriorating capital infrastructure. We did this both as a means to protect the infrastructure as well as preventing future, much more expensive, costs.
In every newsletter I sent during last year's budget process, I warned of our forecasts that showed an ever-widening gap between our expected revenues in future years, and the escalating costs of our current services.
We have received our preliminary revenue estimates for next year, and they show anemic growth at best. While these estimates are preliminary, they show that Federal budget austerity is hitting our local economy hard.
While our real estate market is showing limited growth, our consumption-based taxes, our sales tax, our hotel tax, and our business license tax, are dropping or stagnant.
At the very same time, we are continuing to see blistering growth in student enrollment, escalating costs for benefits for our employees, and unmet needs from across our community.
The very same pressures that are straining the City's resources are also straining the resources of our residents. The resolution adopted by the City Council is sensitive to that fact, and mindful of last year's 4 cent real estate tax rate increase. The guidance resolution requests that the City Manager present a budget in February that does not include an increase to the real estate tax rate or the vehicle personal property tax rate.
Additionally, it does not allow a roll-back of our commitment to our capital budget to resolve our funding constraints within our Operating budget.
Taken together, this guidance will result in the proposal of significant service reductions when the budget is presented to the Council.
I look forward to your input as the Council begins its process in February.