It wasn’t too long ago (actually about 18 months) when City Hall critics, past local elected officials, candidates for local public office, and even the print media found blaming City Hall pensions as the primary reason that the city was in such financial straits. To the credit of city management at the time, two in particular (City Manager Jerry Miller and Assistant City Manager Chris Shippey, who have now left) found that restraining city spending, stream lining city departments, and holding a tight rein on our “electeds” brought the city’s budget under control. Was the pension issue the total problem? Hardly! It just happened to be the easiest target for criticism.
The core issue for those of us who live in our great city is that we expect to have the best city services and more of them each year and will not tolerate an increase in taxes to pay for them. So, fortunate for all of us, our economy kept the lid on taxes, and even saw a decline in one draconian tax – the city’s utility tax, now at 5% from an original high of 10%.
Let’s consider what was actually keeping the city’s revenue stream on an upward climb. Simply stated, it was the economy. Don’t hold your breath, though, we’ve got a problem that hasn’t quite expressed itself yet. That’s the impact of a declining real estate market. Along with a flat market comes the loss in expected increases in property values and the city’s share of property taxes. Add to this, the folks who are now filing “decline in value” applications with the county assessor, a virtual stand still in new construction and the jobs, sales taxes, and new business that are part of that matrix, and we have some real revenue problems.
I was advised by a top official that the budget crisis “surprise” is building and denying the inevitable is wasting valuable time. The mayor and city council have work to do and if swift action isn’t taken soon to address the sharp expected decline in property taxes and utility taxes, if the telephone portion is eliminated by current court action, revenue will not be sufficient to even fund the salary increase and manpower deployment shortfall that is staring down our police department.
It will be interesting to see which elected official takes the lead and deals with an honest assessment of what will be necessary now to avert an inevitable budget meltdown with the incumbent across the board impact on all city services.
In my business, contracts point to “time is of the essence”. I never read that statement anywhere in our city’s charter or communiqués, although it might just be the cliché that should be item #1 on downtown’s New Year’s resolutions.