Saturday, February 13, 2010

Be Concerned about Next Years Budget This Year

A 7 1/2% tax increase in this years municipal budget is something to be concerned about. Taking a multi year budgeting approach, we should make every attempt to average 3 3/4% tax increase for this year and next.

In other words, we need to aim for a 0% increase in the fiscal year 2011 (FY 2011)budget. Sounds unrealistic? Perhaps not. Here is what needs to happen:

1. Start working on the budget March 1 the latest. This part has to be done by the Mayor, City Administrator Bibi Taylor and their staff. Aim for a July or August budget introduction to Council.

2. Hold a retreat to get consensus between the Mayor, Council and senior management on FY 2011 priorities. This needs to happen in March or April. We can argue about details later but let's start with general agreement about what we want our tax increase to be and what is most important to spend our municipal revenues on.

3. The Council has consensus on a FY 2010 budget that has $1 million in budget cuts and sets the stage for savings in FY 2011 that could be full year savings. That will only happen if the Council sticks to its guns at the Tuesday 8 pm budget hearing.

4. The Council will have to direct the administration to reorganize some departments and offices in city hall to make them more efficient and cost effective. This will need to be done by resolution. The sooner this direction is given, the sooner the Mayor and administration can come back with recommendations. This part of the process would have to begin in the next month or two.

5. One thing working in our favor was pointed out by the city administrator recently. Last years pension deferral will be completely paid in the FY 2010 budget and the pension expense for FY 2011 should decrease significantly.

6. A wild card is state aid to Plainfield. We could very well see a decrease in this revenue source in FY 2011. All the more reason to work hard to hold future expenses in check and create the conditions for increasing tax ratables. One strategy would be to keep Plainfield's property taxes lower than surrounding towns. This would make Plainfield more attractive to home buyers, developers and new businesses.

We need a short term and long term budget strategy. The short term approach is up for a vote Tuesday at 8 pm. Please come out and support the Council. Naysayers will be present.

In the long term, there is cause for concern but each of the suggestions above are do-able. Previous city administrator Marc Dashield gave the Council a 5 year budget projection last year that showed a 50% increase in municipal property taxes over the 5 years. We don't have to go there but we will have some very difficult decisions to make. Employees will certainly be affected. Plainfield tends to protect their needs better than the needs of residents in general. Local elected officials have the challenging job of balancing the needs of all constituents.

Sunday, February 7, 2010

It's Time to Approve the Budget

We should have done this earlier in the year but here we are in February, preparing to vote on budget amendments, the next step in the municipal budgeting process. Unfortunately it has been a typical year - we are trying to reduce a high tax increase by cutting expenses. Revenues increases continue to be flat or down so we have no other method to attack the proposed tax increase.

So where are we?

1. the administration introduced a budget with a 9.6% tax increase.
2. the Council Finance Committee (I am a member) proposed $1.1 million in cuts.
3. the Council, as a whole, agreed with most of the changes proposed by the Finance Committee, leading to Monday's Council meeting: the consensus changes will be on the agenda in the form of budget amendments. The Council must vote to approve these amendments so we can advertise the budget to the public, hold a public hearing and (finally) approve the budget for the July 1, 2009 - June 30, 2010 fiscal year.

I hope the final steps in the process are not typical of some previous years decisions. Painful budget cuts have sometimes been beaten back by special interest groups. That would be a big mistake this time around. The Council budget truly spreads the pain to all concerned. Each group agrees that property tax increases are hurting our residents but fights to prevent the cut that affects them.

Expect some groups to be present as the Council works on the budget. Expect some to advocate in the spirit of constructive debate. Expect some to threaten the Council and to spread misleading rumors in the community (example - eliminating positions in the top heavy police division is a personal vendetta against a few captains).

I urge residents to attend our Council meeting Monday night. One of the interest groups that is always underrepresented is homeowners. When elected officials hear primarily from employee unions, budgeting for compensation, health benefits and pensions can and have become a burden that threatens the future of our state and city.

If the Council resists special interest group pressure the 9.6% tax increase reduces to around 7.5%. That is still too high but some of the budget cuts set the stage for more significant cuts next year when we can get 12 months of savings instead of only a few. If the Council bows to pressure, the tax increase goes back towards 9.6% and will mean a higher increase next year. That would be disastrous to residents struggling to make mortgage and rent payments. Come out and advocate for a balanced approach to Plainfields budget. That is what the City Council will be voting on Monday.