Thursday, May 3, 2007

Some (more) thoughts on the budget

Over the past few months and really solidifying in the last few weeks there has been a grass roots effort on the part of a number of citizens to voice their opinions and concerns to the finance committee about the new budget and tax levy.

From what I can see that this intense feeling is coming from the reevaluation and the shift of the real estate tax from the commercial property owners to residential owners. In 2006-2007-tax year the burden was 34% on commercial and 37% on residential owners. With the new valuations the burden is now 25% on commercial and 47% on residential. What this simply means is that in 2006-2007 the you the homeowner paid $0.37 on each dollar collected now we are going to be paying $0.47 on each dollar raised. See my early post about reevaluation for more on this topic.

With such a radical shift in the tax burden the BOA decided to have a 5-year phase in of the new valuations. This is meant to protect the average homeowner from having the burden shifted immediately to them. Please note that there is a State law that requires the City to have a reevaluation every 5 years. We are obligated by law to do this.

Back to the budget. In this new budget we had a number of items that drove the increase from an average of 3.5% to 7.1%. There are a number of drivers. I will cover some of them:

No small part due to increased energy costs. The same big hit we are taking on our home heating oil or gas and electric bill the City has that many times over. The good news is that over the past 10+ years there has been an concerted effort to invest in energy saving technology and upgraded light fixtures, traffic lights and the heating systems throughout City owned properties.

We hired 40 new Police officers and 26 civilians to fill empty and needed slots in all areas of the department. 8% of the total general fund budget.

In the Fire Department we have budgeted for a new class to come in and join the force. 6% of the total general fund budget.

Board of Education increased their budget by $5million to meet Union contracts and general improvements to the schools (this doesn’t include school construction). 38% of the total general fund budget.

Employee benefits –
Medical – $46million
Pension – 28.7million
Works Comp – $7.7million
Self Insurance – $4.5million
Other (Longevity bonus, Sick Leave Reserve, Life Insurance) – $2.2million
20% of the total general fund budget.

It is getting late now and will pick up latter on why the above was asked for and what was done.


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