I knew Mayor Chris Beutler’s re-election would guarantee a property tax increase this year, but I didn’t think he’d admit to it so soon after winning his second term.
But there it was, right between the lines on the front page of the LJS:
The mayor, already deep into budget analysis, said he expects to ask for a public discussion on some serious questions:
* Should the city make deep cuts in services or raise more revenue?
* Should the city have a limited roads maintenance and construction program or raise more revenue? This will include a discussion about using more bonds for roads building.
“Raise more revenue” — how does a city raise more revenue? Through fees and taxes. Fees have gone up every year Beutler’s been in office, so that’s a given. And this year I expect Beutler will finally propose a property tax increase. And any discussion about building more roads through bonds means a property tax increase, since that’s how bonds are paid off.
Beutler promised “serious cuts” — but in his first term he backed off pretty quickly at any whiff of public opposition to his cuts. Pool closures, library cuts, even “meter readers” — very rarely did he go through with major cuts. He often brags about cutting 120 city positions — but only a handful of those were pure layoffs.
He said “revenue increases” will be considered. Again, he’s avoiding the word “tax,” but that’s what a “revenue increase” is.
I expect he’ll try to lay a lot of blame on state lawmakers for cutting state aid, but that only accounts for $1.8 million of the problem. Even before that cut became known, the city was projecting a $6.3 million deficit — and that’s not even counting raises that will have to be given to most city employees. The city projects that gap will widen to $19 million in five years, if things don’t change. So we’re sitting in almost the exact same place we were before he was elected to his first term as mayor.
Beutler said in his interview that the city budget was structurally imbalanced even before the recession took hold and he took office. But Beutler ran for his first term on a promise to fix the budget, and didn’t do it.
Here’s what he said in 2007, while campaigning for mayor:
Citing his experience with state budgets as a 24-year lawmaker, he says it’s time to fix a “structural problem” with Lincoln’s budget: City expenditures are outpacing revenue, according to five-year projections. “The City Council and the mayor have let this go on for way too long,” he says, “so that today what you have going on is essentially a mess.” In the short-term, it’s going to take “real cuts” not “one-time” cuts the council and mayor have made recently. He promises not to raise property taxes to make ends meet.
Seems to me, little has changed since then. Here’s what he said this week:
Before he became mayor, city budgets were being plugged with “one-time funds or other manipulations,” he said. Beutler would like to “restore fiscal order” to the budget.
Deja vu, anyone?
Now before you start accusing me of beating up on Beutler too much, know this: I voted for the guy. So did 65 percent of voters on Tuesday. If that isn’t a mandate to make the tough decisions he promised to make four years ago, I don’t know what is.
It’s going to be a rough budget year — again — in Lincoln. And there appears to be no end in sight to Lincoln’s budget problems.
The city has a projected $6.3 million budget shortfall right now, and that’s not taking into account the cost of employee pay raises, the loss of state aid and the potential loss of tax revenue thanks to changes being considered by state lawmakers. The city projects that gap will widen to $19 million in five years, if things don’t change.
I filed an open records request last week, seeking to see budget projections the city generates every year. Before Mayor Chris Beutler took office, the projections were released to the press in December. But Beutler ended the practice, saying it caused undue consternation.
As a candidate for the City Council, I wanted to see the figures so I’d know what this city is facing. Before giving the data to me, the mayor’s chief of staff, Rick Hoppe, gave the budget projections to City Council members after their meeting last night because they don’t appreciate learning such things in the press. Hoppe said one council member immediately told a Journal Star reporter, who then asked for the projections, too, which is why you see the story in the paper today.
The data indicates Lincoln will be facing a budget shortfall of up to $10 million — perhaps the largest ever in the city’s history — when other factors are taken into consideration. City Budget Officer Steve Hubka projects a $6.3 million budget gap will have to be closed this year — and that’s not even taking into account raises for most city employees. He included annual raises for just two unions, since they have contracts for 2011-2012. He did include step raises, which employees get if they’re not at the top of their pay range.
That should add a few million dollars to the bill. In addition, the projection didn’t assume the state would cut state aid by $1.8 million — as is being considered. Lawmakers are also considering taking away Lincoln’s right to levy telecommunications occupation taxes — another big hit if it passes.
Hubka’s projections assume city sales tax revenue will grow at 2 percent per year and property tax value will grow .75 percent for three years and then 1 percent.
Hoppe characterized the situation in LJS as “a little bit worse” than past deficits. But he acknowledged the effect of the city using $4 million in one-time funds last year to bridge the gap. He also mentioned the existence of one discretionary fund, an economic development fund called the Fast Forward Fund, which has more than $6 million in it. So get ready to see that fund disappear.
Lincoln has had to close budget shortfalls every year for at least six years — and this year will be no different. Beutler was elected on a promise to fix the city’s structural budget problems, but this data indicates the problem has only gotten worse, not better.