CONSEQUENCES OF TAX CUTS
The following is an article we published earlier this year in the hope that it would be of value to our conscientious city officials as they worked diligently to reduce spending to help lower your taxes. Although our suggestions were on the mark, they have taken the position that it is not necessary to reduce spending by such a large amount. One last thought. The City will be saving over $300,000 in reduced charges from the RCC, they are only planning to reduce the budget by $200,000, and they have built in a 3% across the board pay raise for all city employees. Huh? Consider what we proposed, consider what they are proposing, attend the budget workshop on August 1st and let them know which approach you favor.
“There is imminent action by Governor Crist and the State legislature to reign in profligate tax and spending by the Counties and municipalities. It is not that we are being taxed at too high a rate. Florida is in the bottom half, percentage wise, in taxing its citizens. The problem is that their elected officials have not been spending their tax revenues on goods and services that benefit the common good, but rather the “who do you know good.” Because of the way in which property tax is assessed, a category of the taxpayers are punished in a way never envisioned or intended by the homestead provisions of current property tax laws. Let us assume that the so-called Rubio bill is adopted, since it is the most Draconian in reducing the property tax. Let us also assume that our City Commissioners do not impose other taxes to offset the direct property tax loss—such as lighting districts. With these assumptions, the City believes it must reduce spending by 14%, but we do not know 14% of what. The City budget is about $45 million, but about $20 million of that are obligations not subject to a discretionary cut of 14%, therefore, the 14% is probably applicable to only about $25 million. If you add in a 3% inflation factor for 2007, the cut is 17% of $25 million or $4.25 million.
We think this a painful number, but interestingly, not one that will adversely affect service or require that any of the City workers that do the work. On the other hand, if I were a superfluous manager, I would be concerned. Of course, we all know that the current department managers’ immediate task is to figure out how to cut their last year's budget by 14%, and we are not privy to their preliminary efforts. However, we have decided to help, and offer the following suggestions to achieve the goal of $4,500,000:
It should be the policy of the City Commission that no additional future obligations should be incurred for the 2008 budget.
It should be the policy of the City Commission not to incur additional debt to build police and fire facilities buildings. Alternatives using currently approved finds should be sought.
Do not fill current three senior management positions $300,000
Reduce fire department overtime $300,000
Reorganize fire department, reduce number of BCs & LTs $300,000
Reduce police department overtime $300,000
Eliminate four police Commanders $300,000
Appoint a deputy chief of police $?
Reduce 911 payments to Port Orange by $300,000
Reduce subsidy to golf course by $100,000
Reduce CRA projects except west Canal $500,000
Combine City Public Works & Parks & Recreation $200,000
Reduce City Attorney’s budget $100,000
ESTIMATED TOTAL SAVINGS $2,700,000+
That is over half the worst case scenario of $4.25 million, and we have no insight into where the reserves are hidden.
These suggestions may be enough for the best case scenario.
It is food for thought!
The Shadow does not have the ability to generate the correct numbers, and there are those who differ with us offering suggestions like that of combining Parks and Recreation with Public works. We are sure that the City Manager will compile a better list of savings. However, if asked, we will work with City management and staff to achieve an acceptable budget.”