Pre-Budget Process Thoughts
As we enter the Metro budget season, here's where my thoughts are:
$121 million in expected new revenue: Metro is projecting that its revenue will grow by 6.1% in Fiscal Year 2017. That's an increase of $121 million. You can see some high level details in the Budget Presentation that Finance Director Talia Lomax-O'dneal gave the Council on Friday afternoon. These next observations are not in any particular order – just some thoughts on my mind after seeing the presentation slides. Also, all the numbers (except one) are from the slides.
Keep in mind that the budget proposal is for the city's operating budget, and does not include any capital improvements. The capital improvements budget is expected to be released on May 13.
While the city's overall debt load in Fiscal Year 2017 is expected to be 10.85% of the budget (as compared to 10.49% in FY2016), the Mayor proposes that $18.6 million (15.4%) of the $121 million of new revenue will go toward debt service. For me, while I think these numbers are all in the zone of reasonable for a city, it is at least interesting to see a record-breaking $121 million increase in revenue AND also see our debt load increase as a gross number and as a percent of the budget.
You would like to think that if you absolutely kill it on the revenue side, the percentage of your budget that goes toward debt might go down? If one were a cynic, one would observe that record-breaking revenue increases can't go on forever, and ask whether we will be able to anticipate when our revenue increases inevitably recede well enough to also pull back on large increases in new long-term debt. If not, when the economy ultimately downgrades from "record-breaking" to "good" or "eh", we risk seeing that percentage paid to debt bump up a half percent or more in just one year. (To illustrate this, I did some rough math – if our revenue increase for next fiscal year was the same as what we saw in FY15, revenue would go up $51.9 million instead of $121 million next year. If this were the story, the percentage of the budget paid toward debt next year would be 11.2% instead of 10.85%.)The budget also suggests that $33.3 of the $121 million of new revenue go toward our schools, and $29.6 million for salary increases for Metro employees. (I have a meeting scheduled with MNPS personnel this week to hear more about their budget.) In the proposal, that leaves $39.5 million of new revenue to go toward Metro providing additional or new services.
For that $39.5 million, from looking at several different slides, the Budget Presentation shows us how about $24 million of this new revenue is proposed to be spent. Here's a list of the spending proposals I saw in the presentation, along with some thoughts about several of them:
Barnes Housing Fund, $10 million (This is a lot of money, which is good. At present, though, the legislation that created the fund is barely a page and a half long. I think we need some additional structure and oversight to be created. I trust and like the current Metro Housing Trust Fund Commissioners, but it isn't good for anyone to have $10 million per year to go to a commission that has almost no formal structure under existing law. To be clear, I think this investment is a good one, but we need more structure for the Barnes Housing Fund.)
Youth Programs and Services, $2.6 million
Fire Department, $1.5 million
Police Department, $2 million
Metro Transit Authority, $2 million (This is an increase that, I believe, is smaller than each of the last few years. At first blush, it seems incongruous that we would be squeezing down on increases for MTA when we need more and better transit so badly. I am guessing that the thought is to not provide a dramatic increase before the nMotion plan is done?)
Codes and Planning, $492,100 (Our Codes department is so swamped that this number could be twice as high and it would still be reasonable. If someone were to check staffing levels, I think they'd see that Codes is trying to operate with the same size staff they had when the city was a third smaller.)
Parks, $1.6 million
Public Works, $1.2 million
Library, $975,300
Health Department, $780,100
PIPs (Public Investment Plans), $1 million (I believe that individual departments found out on Friday who won the PIP money. I don't know of any public announcement about this yet, though. I did see Judge Calloway late Friday afternoon and she was excited that the Juvenile Court PIP was being funded in full.)
I am looking forward to the upcoming budget hearings to learn more about the proposed budget.Don't have the actual budget yet: As part of my continued learning curve as a new Council member, I learned that the Budget Presentation doesn't include a copy of the proposed budget. I have what the public has – the 39 slide PowerPoint presentation. This week, I'll need to figure out when we see the actual budget.Election Commission follow-up: In my April 20 blog post, I commented on the supplemental appropriations resolution that the Council considered and passed on April 19. Before the Council meeting, the Election Commission withdrew their request for a supplemental appropriation. I said in my April 20 post:
At the last minute yesterday, the Election Commission withdrew their request for a $314,000 supplemental appropriation. I still need to learn more, but the first report I’ve heard indicates that they didn’t really need any supplemental funds?!? I’ll be curious to hear more about this.
It's been a few weeks, and I've still only heard second-hand information. But that information is that a Council member scheduled a meeting with someone at the Election Commission to learn more details about the need for the supplemental appropriation. And, then, before meeting could take place, the Election Commission withdrew their request for funds. I am probably not going to try a lot harder to figure out what happened, but it will be hard to take the commission seriously when it comes to funding requests. I hope a new director gets their business operations squared away.
Wrap-up: As the budget process moves forward, please feel free to send me whatever ideas and questions you have.