Mayor Karl Dean’s administration delivered a proposed $1.58 billion budget to the Metro Council on Friday, taking time to explain their reasons behind not raising property taxes for the fourth consecutive year and instead tapping the city’s rainy day funds to provide revenues for schools.
Metro Finance Director Rich Riebeling called the proposal a continuation of a “consistent budget philosophy” of operating within means and looking at ways to reduce the size of government without sacrificing core Metro services.
“It is not time to raise taxes on our citizens,” Riebeling said.
The proposal for the 2011-12 fiscal year, which requires Metro Council approval before June 30, represents a 3.8 percent increase over the current operating budget. Forty-two percent of the budget is allocated toward the funding of public schools, which requires $670.5 million, as already approved by the Metro Nashville Board of Education.
Riebeling said relying on the city’s reserves is “not in any way uncommon for this government,” adding that the current budget is the only one since 2002 that didn’t use part of the fund balance. This year’s budget would tap $9.6 million from the school’s debt service fund and another $13.4 million from the urban services general fund.
The city has a long-standing policy of keeping its rainy day funds at a level in excess of 5 percent of the total budget, a rule that would continue under Dean’s proposed budget.
“Even with appropriation of the USD fund balance, we will have a fund-balance level higher than when this council took office,” Riebeling said. “Obviously, schools is where you’re seeing the most stress on our budget on an ongoing basis.”
But with Dean’s re-election date around the corner, at least one council member wonders how long the city can continue dipping into its reserves, avoiding tax increases, as expenditures rise and the school district’s enrollment increases.
Councilwoman Emily Evans, a mayor’s office critic who has experience in municipal finance, asked Riebeling for the administration plan to “beef” up the rainy day funds “so that we’re ready for the next recession.”
“I don’t have an answer for you,” Riebeling said. “We’ll address that as we move forward.”
Evans responded, “It’s an election year, and I think my constituents have a right to know if we’re going to raise taxes in ’14 or [if we are] going to cut expenses.”
Riebeling countered: “We will continue to look at in on a year-by-year basis. We will address those issues next year. If you want to raise taxes this year, you obviously have the right as a member of the council to do so.”
Council Budget and Finance Committee chair Megan Barry said the Evans-Riebeling discussion raised a valid point.
“Every time you take money away, unless you increase revenue down the line, you’re not going to replace those funds,” Barry said. “So, there has to be some way we’re going to either cut expenses or raise revenues. That’s the choice.”
Under Dean’s budget proposal, nearly every Metro department would experience cuts ranging from 0 to 3 percent from their current budgets, averaging a 1 percent cut. Riebeling said the city has also saved money by reducing travel and fleet operations, and by implementing a hiring freeze.
Despite the modest cuts, the mayor plans to not close any Metro facilities nor reduce hours of institutions such as the public library system.
In addition, the budget carves out additional funds for new projects such as the construction of a Madison and Midtown Hills (near 12South) police precincts, and a new DNA crime lab; a $3.3 million increase to maintain operations of the Metro Transit Authority; a $850,000 increase to open the new McCabe Community Center; and $788,600 to open a new Goodlettsville Library and to expand the school’s Limitless Library program.
The mayor’s proposed budget has historically breezed through the council with little changes.
Nonetheless, Councilwoman Vivian Wilhoite called for more public investment in southeast Davidson County, by far the city’s fastest growing area. And Councilman Phil Claiborne demanded Metro Public Works do more to address neglected and abandoned buildings.
“We need to be able to find money to help that homeowner that is on the street out there who cannot get any relief for the neglected property that is next door or on down the street,” Claiborne said.
“As we go through this budget cycle, that is an issue that I’m not going to let die until it hits a brick wall,” he said.