$375M budget to be considered How to close $20M deficit still in question

The City Council will discuss the 2003-04 budget at Monday’s caucus meeting.

The council will decide whether to endorse the budget, which was presented by Mayor Glenn Cunningham last week.

Controversy was already on the table when the administration made a synopsis of the budget available a week ago Friday to a media source before giving it to five of the city’s seven council members on Monday.

The two council members who did receive the budget, Steve Lipski and Viola Richardson, had voted for a $125 million tax levy proposed by Mayor Cunningham, while the remaining five voted for a $116 levy proposed by Councilman William Gaughan.

“It was nothing illegal, but you have to question the professionalism of it,” said Councilman Junior Maldonado. “Why should it be given to a public reporting entity before the body responsible for its passage?”

According to Maldonado, 75 percent of the $375,057,015 budget has already been spent seven months into the year, limiting the city’s spending discretion.

Last year’s budget was $346,094,378.

How to best address the deficit?

The city ended last year with a $21 million surplus. Business Administrator Carlton McGee argued at the last council meeting that this should be used for seed money for future growth.

But Maldonado said that the surplus should be used to fill a $20 million gap predicted by the Cunningham administration. Cunningham proposed a debt restructuring plan last fall which would reduce the amount the city owes on its bond debt service this year, but would cost the city more in the long run.

That proposal has been voted down. Another alternative is to raise taxes or cut spending somehow.

“Last year we had a $21 million surplus,” said Maldonado. “No surplus was anticipated, and since 1994, we’ve had no surplus. I’m in agreement that we should save some money for a rainy day, but they said we have a $20 million gap and a $21 million surplus.”

The budget is based on a $106 million tax levy, $10 million less than the $116 million tax levy approved last week. If there is a discrepancy, residents will see a reduction in their next bill. Other money comes from grants, Urban Enterprize Zone funds, Payments in Lieu of Taxes, and the sale of municipal properties.

If the council decides to introduce the budget next week, they will have two to three weeks of hearings where department heads will explain any increases and answer any questions the council may have. After that, there will be a public hearing where the public can comment on the budget.

Maldonado said that he plans to vote against any budget that closes the $20 million deficit with the refinancing plan as introduced.

McGee has argues that failing to restructure the debt will hurt the city’s credit rating for future bonding.

According to Maldonado, there are other options for future bonding.

“If we want to bond, we can bond through the state rating,” he said.


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