The Budget - Again

It seems like we just approved the 2010-11 budget... We did - 4 months ago. So now, it is time to begin the process again to have a budget ready at the end of September 2011. The first budget meeting between the council and the city staff generally occurs around mid February, about a month away. At that time Council will receive a best guess as to what resources (taxes and fees) we will have available given current tax rates, then we will have to provide guidance to staff as to how to proceed to prepare the budget.

The budget process is both simple and complex at the same time. It is simple in that by law we cannot borrow money to pay for operations - we can't spend more than we take in. It is complex in that each resident has a possibly different priority for what we should spend money on. It is very simple and easy to grow the budget (just keep adding expenses!) - it is orders of magnitude more difficult and complex to cut the budget.

If the expenditures exceed the revenues (as occurred the last two years), then there are but two choices - reduce the expenditures, or increase the revenues. It has often seemed to me that the choice is made to increase revenues. Property taxes represent about 50% of the city's general fund revenues. Sales tax is only about 7.4%. We have little to no direct control over sales tax revenue - people's spending does that.

So when the city "needs" money to balance the budget, it just increases the amount of property taxes. This often irritates the people who have to pay those property taxes.

To be fair, people expect a certain level of services from a city - that is what the taxes are for, after all. So rather than calling to cut taxes, or cut spending, or increase taxes (or search for new sources of revenue), I propose that we determine what is the proper level of services for the city to provide. What is the required staffing to provide those services, and what is appropriate compensation for the city employees given the state of the non government (private sector) economy?

That is the complex part - every resident has a different opinion of what constitutes the proper level of services from the City. So over the next several weeks, I intend to discuss here each service and department in the city. I will greatly appreciate input about what residents expect, and what they are willing to pay for.