Posted on 06/16/2006 8:09:32 PM PDT by staytrue
City might have gap of $36 million in ’07, finance director says
Columbus is in its seventh year of spending more than it brings in.
That’s if you don’t include dips into the city’s savings account or a couple of onetime multimillion-dollar payments that bridged the gap.
But the city’s luck — and its savings — could be running out, Columbus Finance Director Joel Taylor said.
Next year, the city could be as much as $36 million short of what it’s projected to spend, Taylor said.
City officials made Taylor’s gloomy prediction public this week, after City Auditor Hugh J. Dorrian said the city is likely to collect $8 million more this year than he had expected when the year began.
Taylor has higher expectations for the city’s earnings than Dorrian — but even so, next year’s projected shortfall would still be $28 million, Taylor estimates.
Mayor Michael B. Coleman didn’t mention the report projecting the deficit, dated May 19, when he discussed the $8 million in unanticipated revenues last week. Nor had his staff released Taylor’s memo.
A projected deficit for the upcoming year is something the city has seen repeatedly this decade. That’s because the city has continued to spend more than it collects in revenue.
For example, a $24 million shortfall projected in October was balanced with the help of $12 million from the city’s rainy-day fund, higher-thanexpected revenues and restricted spending.
But what makes this year’s projection more worrisome, Taylor said, is that the city no longer expects the budget boosts that helped Columbus avoid laying off 34 employees.
Other Columbus officials say they worry about a gap, but Dorrian said it’s too early for him to predict how large it could be.
Voters might not want to hear it, Dorrian said, but raising the income tax is a possible solution.
"There have been a lot of things done" to trim the budget, Dorrian said. "But there’s not a lot left" to do.
With years of attrition, purchasing cutbacks, and a savings account that no longer has much to spare, an income-tax hike might be the only way to match spending to revenues, Dorrian said.
Dorrian acknowledges that when he brought up raising taxes earlier this year, the idea "kinda fell like a lead balloon."
"No one wants to talk about it."
Coleman and his chief financial adviser, Taylor, fall into that category.
"I don’t believe we’re at the point yet," Taylor said.
But Dorrian said he thinks the discussion should be had by November 2007, which would coincide with next year’s mayoral race.
Next month, city officials will start analyzing second-quarter figures to see how close the projection is to reality.
Councilman Kevin Boyce, who chairs the council’s finance committee, scheduled a hearing for July 27 during which administration officials, Taylor and Dorrian will be asked to offer projections and suggestions.
"We want a better clue of where we’ll stand," Boyce said.
One reason Boyce wants the hearing is that Taylor’s forecast assumes things that Coleman and City Council could change.
For one, it calls for a 9 percent increase in the city budget, including the purchase of about $10 million in vehicles. They are purchases the city has put off and is now overdue to make, Taylor said.
It also includes about $5 million in things city departments say they need to purchase.
Things the city can’t change include a 12 percent increase in health-care costs and negotiated pay raises for many of the city’s employees, Taylor said.
The city also can’t control the loss of money from the state and federal governments, Councilwoman Maryellen O’Shaughnessy said.
"These are things out of our control," she said, "but that, too, is a looming threat."
The city has about $12 million in savings it still can use to help balance the books, but the city already has used $60 million from that fund over the past four years, Dorrian said.
Those who rate the city for bonds have warned city officials that they need to stop using the savings to balance the budget.
And many city officials agree.
"It’s like dipping into your savings account to pay the mortgage," Boyce said. "You can’t keep doing that and I don’t think we should."
jandes@dispatch.com
Columbus is also in the 6th year of DEMOCRAT MAYOR COLEMAN AND HAS BEEN SPENDING OUT OF ITS RAINY DAY FUND THAT IS ALMOST EMPTY TO BALANCE THE BUDGET.
Also, "Things the city can’t change include a 12 percent increase in health-care costs and negotiated pay raises for many of the city’s employees, Taylor said."
prior to DEMOCRAT COLEMAN was REPUBLICAN LASHUTKA who built the 60 million rainy day fund and who had a budget deficit of 500 thousand his last year in office.
Actually, prior to Greg Lashutka, Columbus' mayor office was occupied by Rs all the way back to the late 60s. Dana (Buck - outta my way, I'm gonna use this dozer to know down that wall) Rinehart and Tom Moody. Now, they can't even field a viable candidate. Never understood that. Lashutka retired in 1999, (actually, he's working for Nationwide Insurance now) in good graces with the public. Now, there's nothing.
Check that. Not late 60s but the early 70s. Tom Moody took office in 1972.
This in addition to funding government retirees' pensions will be the death knell for cities.
Columbus is going the way of Detroit. So glad that I moved out years ago!
Where's Woody Hayes when you need him!?!
It's going the way of Chicago. I can smell the corruption.
The Columbus I was born and raised in, lived 34 years in, no longer seems to exist.
I swear when I step out of a plane in Chicago I can sense, almost smell the Democrat corruption.
Last year when I went home, I sensed the same thing in Columbus. CORRUPTION.
I look at an area like Clintonville that now looks like it is turning into a whackoville like Berkeley or Boulder.
The Columbus I knew, no longer exists. Even where I grew up on the northwest side near Upper Arlington is turning into an area of kumbaya, whirled peas and tax me please I'm stupid.
all of you have good local knowledge of columbus
I did not know we had so many freepers here.
Let's all make sure that Blackwell wins and even dewine (still better than a democrat) dewine wins.
I'm not sure how normal I may be. ;-) Among many other incidents of normalcy, I do appreciate that my kids can still sing Christmas carols in their school.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.