During the meeting there will be a presentation on:
- Bexley's financial situation - background & current status
- Changes in state funding and their impact on our budget
- A 5-year financial projection for the city's budget
- Options for balancing the projected budget shortfall
A DRAFT version of the budget presentation can be downloaded from the city website by clicking here.
As finance chair, I've been spending a lot of time reviewing our budget situation and working with council, Mayor Brennan, and Auditor Qualmann to present some solutions to the projected shortfall. There are a lot of ways to balance the budget, but finding a way that balances the needs of the residents for quality city services with the desire to maintain as low a tax rate as possible is difficult (that's an understatement).
At the presentation, we will be showing three options for balancing the budget:
Option 1
- No Tax Increase
- $2,900,000 (approx 26%) in cuts to city budget
Option 2
- Increase to a 2.5% income tax rate, with a credit of 75% for residents who have paid local income tax elsewhere
- $1,100,000 (approx. 10%) in cuts to city budget
Option 3
- Increase to a 2.5% income tax rate, with a credit of 65% for residents who have paid local income tax elsewhere
- $400,000 in cuts to the city budget
With each option, we will discuss the practical impact of cuts to the city budget in terms of how it will effect city services: street maintenance, police protection, fire protection, parks and rec, etc.
How Did We Get To This Point?
The past couple of years, and particularly this year, have been a perfect storm for the city's budget. Not only are we two years into negative trending in our city income as a result of the 2008-2010 recession, but we are faced with the prospect of up to 26% in income loss as a result of the Governor's 2011/2012 state budget. Despite several years of spending cuts, we are in a situation where we must either institute drastic cuts that will tangibly and negatively impact city services, or generate new revenue through a tax increase.
Why Can't We Just Cut Out The Waste?
I'm a limited government kind of guy. I spend a lot of time thinking of ways for the city to streamline operations and do more with less. And we've made a lot of headway in recent years - we restructured our health insurance to save 30% over previous costs, we've cut our total number of employees, and we've eliminated wasteful legal and consulting fees that were occupying a big chunk of the budget in past years.
But no matter how optimistic the assumptions, or how creative the thinking, there are no scenarios in which a $2,900,000 cut to the city's budget does not impact the security of our residents or the quality of infrastructure in the city to an unacceptable degree. Simply put, while I wouldn't certify the city to be 100% without fat to trim, there has been a lot of trimming over recent years, and certainly there is nowhere near $2.9m in excess.
But we haven't taken that for granted. We've combed through each departmental budget, and scrutinized each expenditure. And we've been willing to take on some sacred cows, and discuss what impact cuts to the police budget, for example, would entail. Given the depth and scope of our budget problem, I don't believe that any department should go without scrutiny, and that includes the police department. Having said that, I believe that maintaining our safety is of utmost important to our residents, and is the most critical function of our government. Any reductions that would have a substantive negative impact on police service should only be made as a last resort, and would, in my opinion, only be made in the midst of a dire budgetary situation.
Why You Need to Come to the May 24th Public Meeting
City council and the administration have not come to any conclusions on how to best proceed. As part of our discussion of our options, we want to hear from residents regarding what they think is the best solution to our fiscal situation. The feedback we get on a day-to-day basis is diverse, and I wouldn't expect this public forum to be any different. But it is a good chance for us to present the issues in a logical manner, and get some good ideas and feedback from participants at the meeting.
I'm concerned that the worst of our budgetary problems from the state are yet to come, and that we need to cut into our budget more now today, so that we're better positioned for future impacts. I don't want to see us go for the maximum tax or the minimal cuts today, and tomorrow realize that we've been further impacted by the State of Ohio's gradual shifting of the tax burden to local governments. And I've talked to a lot of residents who feel overtaxed and don't have the stomach for the type of increase that is being discussed (in context - even the highest tax increase that is being discussed is lower than the school's property tax levy from last year). And I don't blame them. At this point I'm favoring the lower tax increase - a hybrid solution that requires substantial cuts, but provides some more income to the city to offset the most drastic cuts. But I'd like to hear from you, and I think it's important that other city leaders do, too.
If you can't make it, let me know your thoughts and I'll make sure they're heard at the May 24th public meeting.
If you can't make the meeting, don't worry. In the coming days an online survey will be posted to www.bexley.org to allow residents to provide feedback online.
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