I attended Monday's meeting between Lisa Signori and the Mayor's budget people and the City council. It was held in the Curley room, not the City Council chambers and thus could not be televised so anyone interested in the budget could see what was going on. Not very transparent.
First of all, there is no real budget deficit. The fiscal year 2010 budget will be larger than the fiscal year 2009 budget by an "anemic" 11 million dollars. The city is going to increase property taxes by 61 million dollars on the citizens, an increase of 4.5 percent from this year. This "deficit" that the Mayor is talking about is a deficit because he wants to increase the budget by 6.25 % next year according to Mrs. Signori.
The 140 million they say they are short breaks down as follows:
55 million dollars in salary increases to city personnel (5% increase per employee!)
33 million dollars in higher health care costs (12 % increase!)
15 million dollars more in additional pension costs (up 7%!)
11 million dollars in increased interest and debt service (???)
24 million dollars in increased department budgets (over and above payroll!)
13 million dollars in additional payments to the state (Charter schools & MBTA)
-(11 million increase in revenue)
Lisa explained that this budget planned on 49 million in cuts from the state but that the cuts will more likely be about 40 to 42 million. There is 7 to 9 million.
We have 110 million dollars in reserves. We are also expecting a 22 million cut in state aid in fiscal year 2008.
Then John Dunlap, the Mayor's labor relations person spoke. He was explaining the Mayor' proposed wage freeze to the city's 24 unions. It was very interesting the term he used "wage deferral". In other words, if the unions go along with this wage deferral for 364 days (enough time to get Menino re-elected?) that then the Mayor would make it up to the unions. John explained that the average salary for a city employee was $60,000 per year. If they can implement the wage freeze they estimate they can save 900 jobs. This would save the 55 million dollars in salary increases, and the raises would be given on the last day of the fiscal year so that pensions, steps, etc. would still be realized in that fiscal year.
Councilor Flaherty asked how we were going to pay for the contracts the City signed this year. Lisa explained to him that every year in the budget money is set aside ahead of time anticipating these contract signings. I was surprised Mike didn't know this after his many years on the council. He voted for raises for all council staff just last August, after Councilor Ross and Councilor Murphy sent a report to the council that we had money left over from this fund to be able to afford raises for all council staff. This has been a line item in the budget for as long as I've been paying attention.
Another thing that Lisa didn't explain to the councilors and which no one seems aware is that every year the proposed budget is conservative and usually forecasts revenue at about 50 million below what it actually will be. Conservative forecasting is good, but the Mayor and the budget people should be honest with the citizens about this. So, when the question was asked about how we will handle the 22 million shortfall in state aid, they didn't give a direct answer. The answer should be: we have a 50 million dollar slush fund so we can absorb this.
Bottom line: why is the Mayor proposing a 6.25% increase in the City Budget when the cost of living is nearly flat, and people are struggling just to hold onto their jobs. There clearly is enough money to afford the police and teachers that this city needs. The Mayor has increased the city payroll by 1200 people over the last 5 years, only 200 are cops and 75 are teachers. What do those other 925 do? Why does he use scare tactics against police and teachers? It is not honorable or honest.
When I am elected Mayor, if there have been any cuts in police and teachers in the next year, I will put those people back on the payroll in my first 100 days in office.
Tomorrow: My solutions to the budget "crisis".