Budget - What’s next?
I need to catch up on my day job, but briefly…here’s what’s next for the Metro budget:
The budget we passed creates a COVID-19 financial oversight committee to collect, consider, and recommend appropriate uses of all federal and state funds provided to the Metropolitan Government specifically for COVID-19 relief and recovery. The committee will have nine members. Six members will be appointed by the Mayor. The remaining three members will be Council Members appointed by the Vice Mayor. The Committee members have to be appointed by June 26, 2020. The Committee will submit its initial recommendations to the Mayor, the Finance Director, and the Council by August 3, 2020, and its final recommendation not later than November 15, 2020.
The budget we passed requires the Finance Director to deliver a written report to the Council regarding the feasibility of modernizing Metro’s metered and on-street parking program, and about a sale of the District Energy System. The report is due by July 31.
The budget we passed requires the Finance Director to deliver an updated revenue projection to the Council by August 15.
There is a lot of talk (rightly so) about reassessing revenue projections in August to see if the tax rate can be adjusted down. Everyone should keep in mind that the city also has to plan for what to do if COVID-19 takes another big bite out of the economy next fall or winter. Remember that if revenue comes in lower than projected, the city would then have little choice but to turn to furloughs or layoffs. Metro and its departments (including MNPS) need to have a Plan B ready if revenue just doesn’t materialize.
Next year will be a difficult budget process again. The WeGo transit system is using $20.5 million of one-time federal relief funds to operate this year. Also, Metro is delaying a bond issuance for capital needs (about $35 million of new bond debt costs) into FY22. This means that the first $55.5 million of new revenue in FY22 is already spoken for a year in advance. As difficult as this budget season has been, it should be thought of as the beginning of a several year process to get Metro on solid financial footing.
All of these will drive the work of the Council in the coming money months.