Preliminary Thoughts on 2010 City Budget Proposal
Posted by Jeff Pruitt - 9/22/09 @ 11:41 am - Filed Under City Council, Featured
At tonight’s city council meeting the administration will present their budget proposal for 2010. I will reserve some of my judgment until I see the presentation but I am extremely skeptical at this point based on what I’ve seen. The biggest concern I have is with the administration’s inability to deal with the inevitability of falling property tax revenue. Home values are down 8% in Fort Wayne from 2006-2008 and as I pointed out previously this will show up in the budget two years from now.
By their own admission the budget is unsustainable and yet the mayor’s strategy once again seems to be one of hoping the state legislature saves the day - a prospect I find highly unlikely:
The city’s $177.9 million spending plan uses some of the city’s rainy day money and pension cash to achieve balance, a strategy that won’t be sustainable in future years, Controller Pat Roller said.
It gets the city through 2010 and gives the city time to seek other sources of revenue and lobby the state for changes that would help, Henry said.
“What we’re doing is buying time,” Henry said.
I’m sorry but now isn’t the time to be “buying time” - now is the time for action and leadership. There is no doubt that property tax revenues are going to fall over the next two years so what is the plan to solve that problem?
Read Mayor Henry’s quote again - he wants to “seek other sources of revenue“; for those of you scoring at home that is typically called a tax increase. The answer to this budget issue is straightforward but requires something the administration has been hesitant to do - cut spending. Since Henry is unlikely to do it, the council will have to do it for him and for us.
For some additional context in regards to how the numbers will break out in the future go back and read my post on 2010 city budget projections. Right now, I’d say the revenues are tracking the adverse or more adverse scenario but the city’s budget comments seem to be setting expenditures under the optimistic scenario. This would be a recipe for fiscal disaster…
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3 Responses to “Preliminary Thoughts on 2010 City Budget Proposal”
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“What we’re doing is buying time,” Henry said.
What does it cost to buy time? It certainly is not free. I agree with Jeff that it is time for leadership and action. I see other counties having difficulty and they are dipping into rainy day funds to get through. The problem is they are ignoring reality. Home prices are falling or stagnant and this leads to decreasing revenues at worst and flat revenues at best. Yet we see pay raises for city and county employees.
Leadership would be to access the resources now and implement rationing during difficult times. What this city and other local, state and even the federal government ignore are down turns. When they buy time, it always increases the problem down the road.
When will Ft Wayne tire of politics as usual? Kicking the can down the road to the next election is not leadership. With a few thousand petition signatures, things could be changed.
“For municipalities of population 50,000 to 99,999 the council/manager form is the favored system by almost a 2-1 margin. In addition, “Fifty-four percent (54%) of municipalities with a population between 5,000 and 250,000 residents are governed under the council-manager structure (2,738 out of 5,109)”. Regarding the cumulative distribution, since 1984 mayor/council governments have DECREASED from 3686 to 3145 while council/manager types have INCREASED from 2290 to 3534.”
ICMA
http://icma.org/upload/library/2009-02/%7B43F17F96-211D-4D8E-ABBB-1ED6E3FA75B3%7D.pdf
http://icma.org/upload/library/2009-06/%7B13B1F47D-1153-4703-B32A-B42637524116%7D.pdf
If you want to know why the Indiana mayor/coucil system simply does not work, watch this short presentation.
http://www.youtube.com/watch?v=NhY8uN2rvcE
I think the city should hire another consultant to see what the next step should be. Oh, but keep the fee under $100,000 so that nobody has to approve it. Amazing how many consultants charge fees in the $90,000 range….
Kent