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Another Difficult Budget

Mayor Peyton has proposed a budget that uses a mix of spending cuts and tax increases to close an estimated $60 million gap between revenue and spending.

The budget calls for the elimination of 40 vacant positions, reduces part-time and overtime funding, and maybe most interestingly, does not renew contracts for state and federal lobbyists.

On the revenue side is where it gets sticky. The Mayor’s budget follows an increase in garbage fees with another 9 percent increase in the property tax millage rate. With the average price of a home in Jacksonville about $142,000 these days, it boils down to less than $100 per year, but there are a lot of homeowners who are struggling to pay their taxes now, and that $100 might really make a difference. That’s after a 9 percent increase last year.

The cuts that were not made in the Mayor’s budget include things like the wholesale closing of libraries and the elimination of the Fourth of July fireworks. It had been suggested that the city turn off half its street lights to save money. But libraries which had hours cut earlier this year will continue to operate on the reduced schedule. All told, the cuts total about $40 of the $60 million gap.

There have been significant concessions made by both the firefighters union and the Jacksonville Supervisors Association, both in pay cuts and benefit contributions. Those bargaining bodies are to be commended for making a painful decision which will certainly help keep the budget in balance, and which the mayor says could serve as a model nationwide for municipalities facing similar situations. And there are a lot of them.

Mayor Peyton said in his budget address Wednesday that, for the first time since consolidation, the city’s $955 million dollar budget represents total spending that is less than the previous year.

The Mayor can only propose a budget. Now it is up to the City Council to go through it with a fine tooth comb, and see if the cuts are appropriate, which certainly needs to be done before any revenue increase is warranted. There are five former council presidents on the finance committee. That’s a lot of firepower, and current council president Jack Webb has said nothing is on or off the table. He’s pledged to actually read the budget before deciding on any tax increase.

That should not be undertaken lightly, and the current council certainly will not do so. They are not alone in facing these challenges. Municipalities nationwide are faced with falling property values that are eroding their tax bases, and increasing demands on services. Jacksonville is no exception, and the fact of a struggling worldwide economy does not seem to alleviate the desire for government services. Mayor Peyton says his proposed millage rate for the coming year of 10.12 mils, or $10.12 for every $1,000 of assessed value, after homestead exemptions and other deductions, is “revenue neutral.” It’s what the Mayor says is needed to maintain the level of services currently offered by the city.

The finance committee and the full city council needs to be judicious in looking for additional savings. We’ve been hearing for some time that the budget has been cut “to the bone”, but the projections made by the Mayor in his budget address seem to indicated that the current budget is but the tip of the iceberg, and if there are not fundamental changes primarily in employee pensions it may not be too far in the future that we are pining for the days of 9 percent tax increases. It would seem on its face that neither is sustainable for the long term. So along with the fundamental changes that are likely necessary to put the city’s financial house in order, it is incumbent on the legislators to be sure it has found and eliminated as many redundancies as possible, and that the government is running, as they say in the aviation business, at peak lean instead of full rich. All the while cognizant of the fact that every “redundancy” is also a person, and that person very likely doesn’t feel they are redundant.

That’s the Sophie’s Choice that is faced. None of the options are particularly good. It is never easy, or pleasant, to put a human face on the numbers and ask a person with bills and taxes to pay to make do with less, or nothing at all. But neither is it possible to continue to ask taxpayers, predominantly home and business owners, to continue to dip into a well that is on the verge of running dry. So, if we are to continue to cut city government, there needs to be a business climate that creates jobs so that those displaced out of civil service have somewhere to go. Because an unemployed person is far more likely to default on a mortgage, affecting the property taxes base, buys only essentials, which affects sales taxes, or leaves for greener pastures.

Just ask Detroit.

3 Responses »

  1. The budget includes more than a 9% increase in the tax rate, we just endured a 100% increase in our garbage fee, and JEA is raising rates again (they are a BIG portion of the City's income). While these technically aren't an increases in our taxes, they are still increases in our "essential" living expenses.

    The only "difficult" part of this budget is whether or not those at City Hall will have the backbone to make the cuts required to bring our City spending within it's means. The main thing they need to do is determine what the term "essential" actually means, and eliminate anything that doesn't fit that definition. Does that mean we would see the demise of a lot of worthwhile programs and services that add to the quality of life in Jax? Absolutley, but people having to go without AC or seeing a movie or buying their kids new school clothes or being able to go on vacation or going out to dinner every once on awhile impact our quality of life as well.

    They should approach this budget the same way they would approach their household budget, the amount of income is fixed and that's the number they have to work with. Once they've defined the "essential" services then if there isn't enough money they can look for new sources, or if there's extra money they can add other services back in.

  2. As the city and the unions come to another short term agreement, I wonder when our city will face the 900 pound gorilla in the room. Jacksonville’s financial challenge isn’t the retirement fund, but the environment that continually makes Jacksonville a wasted opportunity. Don’t get me wrong. I love this town, but the combination of pride, poverty, and presumption have hindered this city of achieving the greatness that is her potential.

    Jacksonville has many a wasteful element in it’s budget. Some are encompassed in pride, some in greed, some in over-reaching compassion: none of which are acceptable.

    Take , for example; the Mayors pride in the fact that Jacksonville has the largest park system owned by a city in the world. This is a proud proclamation, but the mayor, his minions and the city accountants should remember the advice of Benjamin Franklin:

    “Fond pride of dress, is sure a very curse;
    E’er fancy you consult, consult your purse.”

    The tenacity to hold this land; land that causes funds to drip like a leaky faucet, is an exercise in pride of ownership, but it’s an extravagance that the city can ill-afford. I find the threat of laying off the most honorable of our society, to hoard what cannot be afforded to be short-sighted and naive. The Mayor would retort that Jacksonville must improve itself if it’s to attract business to offer better employment opportunities. This is true, but he’s trying to put lipstick on a pig if he thinks city-owned tractors mowing little used fields of grass are the standards which corporations use to judge a city.

    Growing corporations aren’t looking for the place where they can relax- they’re looking for the place they can grow. Growing businesses want to build- they want a place that’s going to be less about benevolence and more about effective productivity and profit. While businesses often acknowledge they have opportunities to make their successes value-added socially; one has to remember that the ability to be benevolent is the result of the profit from which the benevolence originates.

    Businesses are interested in locations with people who match their employment needs. If a city has under-educated ruffians, then the the city will attract blue-collar businesses- if it attracts any at all. If the city has a more educated population, then the more technical and white collar businesses will choose that city.

    No business wants to join a city with high crime, an under educated workforce, and daunting fiscal challenges. They understand that they will have higher costs, lower productivity efficiencies, and will become the “cash cow” after the lucrative tax breaks sunset.

    For a city to have lower crime rates, there must be a strong focus on the reduction of criminal elements: both reactive and preventative. In my opinion, Sheriff John Rutherford and State Attorney Angela Corey have sent a strong message that “crime doesn’t pay in Jacksonville”. This dynamic duo have worked together for the past seventeen months and the results are evident- even in an economic downturn.

    While the city and it’s leadership understands that “Prevention” is vital to perpetuating low crime rates- I think the city has become extravagantly benevolent in it’s approach.

    For example; the propensity to take poor children, put them in new buildings, and “show the parents how they should live” is counter-productive. This sets the bar too high for some of the mothers. Mothers who quite school when they birthed the children that the city now fosters. Anyone can get into a clean new place and look good until it begins to disintegrate.

    Instead the city should use existing facilities, clean them up; keep them clean, and teach the children and young parents that it isn’t the possessions that create pride and self respect, but that the possessions are a by-product of those qualities. Give these young families an example of something that’s reasonably attainable. Give them something that will help them from the inside out.

    Any parent who affords the fostering of their child should be considered a ward of the city. That means drug tests, home inspections, and employment are mandatory to accessing those services. The goal of the benevolence is to lower crime rates and improve the quality of citizenry in Jacksonville: THEN the corporations will look to our city with approval: even without the tax breaks.

    City employees should realize that the piggy bank has a hole in the bottom of it. The money has been spent- and because they too are voters, they are just as responsible for that fact as well as their neighbors and the politicians who spent the money that was to finance their retirements. Because they are just as responsible, they are also responsible to bare some of the ramifications. Instead of retiring and collecting benefits after twenty years of service, they should be willing to wait until they are of retirement age like everyone else. I personally don’t know of any corporation that pays vested retirement benefits to their employees before retirement age. Nor do I know of any corporations who retire a person, rehire that person, then pay them double benefits when they retire the second time. Again, Benjamin Franklin noted: “Poverty wants some things, Luxury many things, Avarice all things”. Enough is as good as a feast, and one retirement from the city is “Enough”.

    Jacksonville residents have the greatest responsibility. No longer can they vote for the person who will drain the kitty into their neighborhood. They must look at the fiscal results of their representatives- and award them with another term, or bring them back to the neighborhoods as former representatives based on their ability to balance the City Budget. One vote counts, and that vote comes with the responsibility to cast it intelligently.

    Jacksonville has many strengths, and many weaknesses. We have copious amounts of natural and human resources that could make her bold and successful. But she needs a new direction. A direction that balances industry with leisure, circumspection with ideology, and frugality with pride. We are in need of a new direction, and new leadership.

    We can no longer afford the luxury of pretense. Until we:

    - improve our fiscal situation,
    -decrease the percentage of those taking instead of giving,
    -improve the results of our schools,
    -and balance our assets with our resources;

    this will be the city of “missed opportunities”.

    Our Mayor, our Leadership, and the unions that work with them can either drain the well dry, or work to make her the most financially stable place to live in America.

    The issue isn’t the parks, it’s not the amenities: but rather the safety and well-being of those who are value-added to the community: those who pay the taxes that are being squandered. Only after these issues are satisfied should Jacksonville look for ways to increase her benevolent activities , and her aesthetics.

    When we accomplish these goals, the Fire and Police Retirement funds won’t be a problem.

  3. Didn't they make real progress on Union pay and agree to adress pensions seperately?

    Pension reform is on the Florida Tax Watch wish list too. Local governments throughout the country are reviewing these plans-some moving away from defined benefit plans or requiring matching contributions from employees. The private sector faced the music long ago. How much patience will they have for raising taxes to cover pension benefits when they do not have any?