It’s May, and that means we are in the homestretch of the budget season. Now that members of the Finance Committee have reviewed the proposed fiscal year 2012 spending plans for each of the City’s departments and offices and the full City Council has heard from the public, council members are in full deliberation mode about what makes the cut.
In his proposed $92.6 million operating budget and $9.1 million capital budget, Mayor Cohen has maintained the property tax rate but has called for about $5.4 million in fee increases for the City’s Enterprise Funds. The fee increases are essential to again make the enterprise funds self-sufficient and fund much-needed infrastructure water, sewer and stormwater projects.
Through those fee increases, the City can push ahead with efforts to replenish its reserves and reduce the need for short-term borrowing, such as through lines of credit. The City’s General Fund has subsidized the Water and Sewer funds to the tune of more than $4 million in recent years. But through increasing the fees and other measures, the Mayor’s proposed budget would allow the City to set aside $7 million in fund balance in FY 2012.
Much has been said about the size of the City budget. But when you strip away the proposed fees, the Mayor has presented the City Council with a status quo spending plan that calls for just $525,000 in new discretionary spending, such as launching a downtown Circulator bus service and enhancing economic development through fund set-asides for the Main Street Maryland program and the Capital City Cultural Arts District.
So, why is the proposed budget so much larger than the current-year budget of $75.1 million?
- Under the leadership of new Finance Director Bruce Miller, the budget accounts fully for all transfers between funds as well as grant spending. Expenses were understated in previous budgets, but not anymore. So the budget grew by about $8 million alone through more transparent accounting.
- Then there’s the rising cost to maintain the existing workforce and services. Every municipal government is dealing with health care premiums, higher liability insurance and higher fuel costs. Add about $4.5 million for those and other related expenses.
- Finally, add the revenue generated from increasing the Enterprise Fund fees ($5.4 million) and minimal discretionary spending ($525,000) and you get a proposed budget of $92.6 million.
The Finance Committee is scheduled to meet from 3 to 6 p.m. tomorrow at City Hall (televised live on City TV: Verizon Channel 34 and Comcast Channel 99/100), and perhaps it will meet at least once more this week before presenting its budget recommendations to the full City Council on May 9.
A possible final vote on the budget could occur on May 23. We’ll keep you posted. In the meantime, feel free to leave a comment.