MUNICIPAL BUDGET - FINDING WAYS TO REDUCE - MAYOR BHALLA’S PROPOSED 5.6% TAX INCREASE
In April, Mayor Bhalla handed the City Council his recommended budget with a 5.6% tax increase. I am not on the City Council’s Finance Subcommittee this year so am not as close to the discussions with the administration on the budget. But I still keep a running spreadsheet and feel I have a good understanding of the city’s finances.
I firmly believe that in this environment, and in every environment, we should be working to do what we can to keep taxes as low as possible and spend taxpayer’s money judiciously.
As I mentioned previously and as the city announced, this budget is heavily impacted by the recent union contracts negotiated by the mayor and approved by the City Council. Our police, fire and municipal professionals were working without a contract, including no pay increases, for four years which included during COVID. For police and fire, the newly signed contracts provided for 3-3.5% annual increases during that time, payable in 2022. So take 3% x 4 years and simple math says fire and police salaries go up 12% in 2022 vs. 2021. The budget shows increases closer to 19% or $6M for regular pay for police and fire. Without significant offsets, including a $3 million reduction in estimated health care costs, this increase alone would be an approximately 10% tax increase.
Please reduce spending overall to get to a flat tax at most
Areas to consider reducing to get there totally approximately $2.5M (which would bring down tax rate to 1.3%):
- Eliminate S&W and benefits costs for
the additional person added to the mayor’s office – approximately $150,000. Mayor Zimmer had two people in her office to handle constituent services, communications, and the needs of her office – she had a Chief of Staff and Director of Communications. Mayor Bhalla has four – former Chief of Staff / now Legal Advisor, a separate director of Constituent Services, a Director of Communications, and a new Chief of Staff
the director of housing – approximately $110,000. A newly created role for an ex City Councilperson that did not previously exist.
one associate corporation counsel – approximately $100,000. There are currently three, with one acting as Legal Advisor to Mayor Bhalla.
both recently added public safety roles – Public Safety Director - $150,000 and Public Safety Consultant - $50,000. These are both newly created roles that didn’t previously exist. We just promoted a new Police Chief and increased his salary significantly – we should give him a chance. We have two fire chiefs and one head of OEM. Combined these four are paid with benefits approximately $1.2M
Reduce headcount increases in 2022 in environmental services – approximately $150,000. Environmental Services has headcount growing from a low of 57 in 2020 to 79 in 2022 with 8 hires in 2022. I recommended with delay a few, but not all, of these and reassess in 2023.
- Remove impact of the non recurring, one-time retro pay being paid to certain police officers totally approximately $1.4M. Under one of the police contracts, the city paid in February, a one year retro active salary payment for 2021. This is non-recurring so should not be a permanent part of the tax basis and can be offset with the use of surplus.
- Fund all capital projects via bonding (like IT investment in HPU) – approximately $400,000
Areas to consider increasing:
- Senior programming – an additional $15,000 for more and more uptown activities
Notably missing from the budget:
- Any expected costs relating addressing cannabis tourism
Of note, as I am writing this, it looks as though the Mayor's budget has a reduced amount of PILOT funds that had previously been earmarked to be shared with all of our public schools. This has been a difficult and often emotional issue within our community as we try to figure out within the constraints of the state funding formula how to distribute to the schools what was intended by City Council resolution to be at least 25% of the PILOT payment from the 770 House development.
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