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Thursday, September 02, 2010
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| | Email this article • Print this article | Council facing tough decisions on budget; cuts vs. new funding
Glencoe City Council is faced with some difficult decisions as it hammers out a proposed 2010 budget by Sept. 15.
At last week's workshop session, the reality of the recent cuts in local government aid (LGA) set in. The proposed budget is $180,000 short in revenues, so either more revenues need to be found, or more cuts in expenses need to be made. Or both.
The general fund budget calls for a 3 percent increase in local property taxes (ad valorem). Combined with debt service, the increase in the local property tax portion for the city's budget is 6.87 percent. Both figures are in line with past budgets.
The difference, however, is the other portion of the budget's revenues, LGA, the portion the city receives from the state each year. It has already been cut by $245,000 for 2010, on top of the $123,000 "unalloted" by the governor in late 2008. There is no telling yet if the governor will "unallot" even more state aid late in 2009 to further aggravate an already stressful financial situation for cities and counties.
For years, Glencoe city councils have held the line on local property tax rate increases. In good times, growth in the form of additional development helped pay the budget increases with an expanded tax base. Now that cushion is gone.
With the 2008 LGA unallotment and 2009 LGA cuts, what fat was in the city budget is gone. Now necessary programs are starting to be impacted, and some of those impacts will hurt.
Capital expenditures are always a target of budget cuts, but a lot of the proposed $402,000 in capital expenditures is locked into leases and payments for things like fire trucks, police squad cars, buildings and equipment. Those are fixed costs.
What is left are the other optional expenditures like street sealcoating that has been an annual cut in recent years. If maintenance work is not done in a timely fashion, later repairs will be more costly.
The city's trails system and the proposed campgrounds also are easy targets to cut because they are not deemed necessities.
Replacing a worn-out mower in the park department may have to be delayed as well, forcing costly repairs to machinery that is falling apart. While this is happening, the city continues to add new parks (and grassy areas) to its system.
The library's requests for books and materials annually end up on the budget-cutting floor. This year is no exception.
The council members even debated the replacement of a new fire truck, something that is rarely questioned.
But the toughest part of the cuts generally involves city staffing, in particular the police and street departments.
The street department will not replace a position that has been vacant for most of the year.
The police department is down two officers, one an investigator position, and the verdict is still out about filling those vacancies. Do you replace both positions, only one or none?
Whatever is decided may determine whether police overtime skyrockets as it did several years ago because work shifts need to be filled. The philosophical debate may be how much policing do we need or want?
The City Council is seriously looking at finding new revenue sources, especially through new franchise fees on natural gas and electricity users, which is most of us.
Call it what you like, but it is still a tax. It seems user taxes are more palatable than an increase in property taxes. It is really whether you take the money out of your right pocket or left. It is still your money.
Council member Chuck Shamla is right. The City Council needs to be careful about adding additional tax burdens onto the city residents. There is a limit to what citizens can bear, especially in hard economic times.
If a new tax is to be imposed, it needs plenty of public debate. No one likes taxes, but some taxes are a necessity.
But are franchise fees needed right now? Has the city explored all other options first? New franchise taxes should be the final resort, not the first option. Once in place, they never go away.
- R.G.
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