Finance Committee scrambling to cut $2.6 million from budget

This past Thursday, one of us attended the first of 3 Budget Hearings scheduled by City Council’s Finance and Audit Committee to hear residents’ ideas about how to address this year‘s $2.6 million deficit (see 1/27/11 Auditor’s letter below). 15-16 community members attended in addition to Mayor Williams, Recreation Director Jenny Wallace, Treasurer Tim Maloney and Tax Commissioner Chuck Barlow. Both the hearing and the Finance Committee meeting that immediately followed will be playing on local cable Channel 4 soon and on the NCT website under our Links on the right.

One interesting question that was discussed during the hearing was whether the City could temporarily increase either the earnings tax or the sales tax. Even if Council were to increase one of the taxes, the increase in revenue, the amount unknown at this point, would not start until 2012, too late to offset this year’s deficit. Several people expressed concern that raising taxes would negatively affect the City’s ability to attract new business/development as well as hesitation about raising taxes during bad economic times.

Following the Budget Hearing, the Finance Committee met with City Auditor Jim Stith in attendance. Right away, Chairperson Victor Schneider delved into the subject of layoffs. He asked Jim Stith the savings for 1-2 layoffs of personnel in each of the following departments: Building, Public Works, Health, Recreation, Auditor, and Treasurer. Mr. Schneider rather emphatically stated all auxiliary police would have to be cut and that the City would not pay for crossing guards after this school year. Ballpark total: $500,000 to 600,000, a far cry from the $2.6 million needed, and that estimation does not take into account separation costs and related expenses, which the Auditor is calculating and will report to the committee. At least for the moment, fire and police layoffs are not on the table because of each department’s contractual minimum man requirement. Mr. Schneider stressed that cities and states around the country are having to make tough decisions because of decreasing revenues and that the Finance Committee is not prepared yet to make recommendations to City Council.

The pressure is on because of two important deadlines that are looming. By March 31, the Certificate of Estimated Resources must be submitted to the Hamilton County Auditor. The City’s 2011 appropriations cannot exceed the estimated resources, which is calculated thusly: the 2010 balance that’s carried forward + revenue - encumbrances. The other deadline is April 1 when City Council must pass a budget reflecting $2.6 million in cuts.

Finance Committee members want and need input from residents about any ideas they may have overlooked. We urge our readers to attend one of the two remaining budget hearings:

• Thursday, February 10th: 7:00 - 8:00 p.m. - Council Chambers
• Tuesday, February 15th: 7:00 - 8:00 p.m. - High School Mini-Auditorium

Here’s the schedule of other budget-related meetings:

• Thursday, February 17th: Final Mark up - 2011 Budget - 7:30 p.m. - Council Chambers
• Saturday, February 19th: Finance Committee meeting (if needed) 9:00 a.m. - Council Chambers
• Monday, February 21st: Finance Committee meeting (if needed) 7:30 p.m. - Council Chambers
• Tuesday February 22nd: 2011 Budget Presentation to City Council - 7:30 p.m. - Council Chambers

Although nothing is cast in concrete yet, layoffs appear to be likely. What else do you think can be done address the $2.6 million deficit?