Deficit puts renewed focus on services, need for citizen input
The financial picture of Annapolis looked so different just a few years ago.
As Chief Administrative Officer Doug Smith laid out yesterday during a quarterly budget presentation at a City Council work session, the city was flush in tax revenue as year-over-year property values increased.
A few years ago, Smith noted, the city had several financial options at its disposal:
1) Hold down spending and put surpluses in a reserve fund
2) Direct new tax revenue toward one-time infrastructure projects
3) Reduce the tax rate
4) Reduce the city’s debt load – pay down a portion of our bond obligations
5) Direct spending toward increasing salaries and benefits, hire more personnel and create new programs.
By and large, the previous administration and City Council chose the last option. Alderwoman Sheila Finlayson said yesterday that improving salaries and benefits has helped maintain a competitive work force. But in the aftermath of those spending increases, coupled with a steeply declining economy, the financial picture is bleak today.
Mr. Smith and Finance Director Tim Elliott yesterday presented projected figures that show a $2.6 million structural budget deficit for the current fiscal year ending June 30, 2010, and a $6.4 million structural deficit for fiscal year 2011.
Simply put: The city is spending much more money than it’s taking in – and significant changes must be made immediately. To put the situation in context, Mr. Elliott said Annapolis’ financial circumstances are the worst in his 26 years working for the city.
Now, Mr. Smith noted, the city has fewer financial options: raise taxes, cut spending or do both. In the face of this challenge, Mr. Smith made clear yesterday that raising taxes is not an option for the Cohen administration.
The answer is to cut spending. What is the administration doing about that? First, the mayor has asked department heads to submit budgets that are 5 percent below their base budgets for the current fiscal year. Likely, Mr. Smith and Mr. Elliott said, those reductions won’t be enough alone to bring the budget back into balance.
The administration will also rely on the Blue Ribbon Commission report and is eagerly awaiting the formal presentations next month from the mayor’s transition team, the Idea Team, which will recommend efficiencies in government. Also next month, a mayor-appointed committee on contractual employees will also produce recommendations.
The question is not if the city should make cuts – the question is what gets cut. To that point, Mr. Smith, Alderman Ross Arnett and others said the city must determine what the government services that the city cannot live without.
That’s where we need you, the residents, who best know what city services are essential and what services that, in less prosperous times, should be reduced or eliminated. Please let us know your thoughts in the comments section below, send the mayor an e-mail at mayor@annapolis.gov or reach out to your alderman.
Much must be accomplished before the mayor presents his budget to the City Council on March 8 and the council adopts the budget in late May. We need your help as the city leaders attempt to forge the best path during this difficult time.
I’ve been taught the purpose of City government was to deliver core services first, and the duty of City government was to deliver those core services in an efficient, cost effective manner. After budgeting for delivery of core services, remaining funds can be used for other good and right purposes. In economic tough times, getting back to basics / focusing on the core reason City government exists, may be the best way forward.
Mayor Cohen:
I’m happy to see that you are using technology to keep everyone abreast of situations. You probably already know, you can please some of the people some of the time, but you can’t please all the people all the time — communication is the key and I applaud you on your efforts.
My second concern, is the non-existence of education in your core administration team. Education plays a significant role in everything from government to the environment. How can we mend a “tale of two cities” together without first having the truth in education or the lack thereof? I checked with other council administrations in the state of maryland — guess what I found in all of them? Yes… Education.
In closing, when I ran for public office, there was one resounding message that was not only in my message, but in my opponets message and that was of education. Mayor Cohen, it is of no ill intent to say you should have education as one of your transition team committees (The Idea Team if memory serves me correctly) or not. You see, education can be like a smile. It can be given freely under good and bad conditions but the important thing is, once recieved do you make conditions to smile (educate) another? I applaud you for making a difference Mayor Cohen!
B-OWT
Mayor Cohen:
I want to second the comment above that these blog comments coupled with the your administration’s efforts to shine a light on the budget crisis facing the city is a welcome development.
I urge you to use all channels available to you to publicize the choices facing the city. You will never get consensus on what is an essential core function, but a greater understanding on the part of the public will hopefully lead to widespread—even if grudging—support for the decisions the mayor and council will have to make.
Mayor Cohen,
Thanks for the marked change from the previous administration in openly discussing the money management problems which have gone unaddressed by the Council for far too long. The derailing of the “gravy train” of property tax increases is something many of us feared long ago when we urged you and others to restrain such growth and the temptations to spend. Now at least we have a common reference point for fixing the budget.
A word of caution and a suggestion: previous Councils have called upon citizens to suggest cuts with an almost implicit warning that any lack of effort on their part is justification for a similar lack of effort with regard to cutting from city officials. Ultimately you and the Council members are responsible for handling the budget, although of course I agree that public input makes for a more constructive process.
My suggestion would be to provide as much detail about budgetary items as possible. First, many of us (including myself) are not schooled in such things as government budgets. Second, a common refrain from the Council and the Media is that the Mayor’s Office hides such information (I’ve heard that for more than a decade). Finally, the documentation I have seen posted has seemed woefully inadequate to determine personnel, effectiveness, and needed level of funding.
Just like your recent attempts to address excessive overtime costs, a similar approach to overhauling how budgets are prepared, presented, and discussed would go a long way towards enhancing public trust in City management.
Best Wishes,
Mike Dye
1315 Hawkins