And so budget season arrives again.
This week the Westfield City Council Finance Committee commenced reviewing the annual budget submitted by Mayor Daniel Knapik at our June 4th meeting.
The budget totals $125,377,690 in spending and revenue for general city government, plus additional sums of $2,337,651 for the Ambulance Fund, $5,161,098 for the Water Department, $5,487,000 for Sewer & Wastewater Treatment, $391,745 for Stormwater management & treatment, and $438,350 for the Community Preservation fund. Outside the general government budget, all but the Community Preservation Fund are self-funding using operating fees; the Community Preservation Fund, which is used to fund recreation, low-income housing, and historical preservation in the city, was voted in at the ballot box in 2003 and is funded by a one percent surcharge on real-estate property tax bills.
This year, to support the submitted $125.4 million budget, the proposed fiscal year 2016 budget calls upon a 3.75 percent property tax increase, an increase in the hotel occupancy tax, a new surcharge on restaurant meals, and an additional $1,800,000 in leftover cash from fiscal year 2015 to cover the remaining gap. The actual cash draw will likely be higher, as the Westfield City Council voted down both the proposed meals tax increase and room excise increase by wide margins back in March. Under City Council rules, these tax increases cannot be brought up for consideration again for the rest of this calendar year without the express consent of at least 10 of the 13 members of the Council (the same Council that just voted them down this spring); the fact that the mayor has decided to insist upon using this approximately $344,000 in non-existent revenue in his budget anyways despite its obvious unavailability means the budget submitted to the Council was out of balance before it even reached Council Chambers this year.
And, um, yes I said 3.75 percent property tax increase for Fiscal year 2016: property taxes levied totaled $65,381,547 for FY 2015; exclusive of growth, the proposed collection is $67,682,517 – an increase of $2.3 million dollars, or 3.75 perceng. Proposition 2 and a half is still in place, but there were a few years back when the city didn’t levy the maximum allowable 2.5 percent. The mayor’s budget claims those banked taxes this year in addition to the traditional current 2.5 percent legal increase, resulting in a total tax levy increase above 2.5 percent. If property values remain stable, the resulting tax rate of $22.36 per thousand would put us about 4 year away from hitting the maximum statutory rate ceiling of $25 per thousand, putting us in the company of communities like Springfield, Holyoke, and Monroe – none of which ever celebrated hitting that ceiling themselves. Nor should they have….
And unless the City Council finds cuts totaling over $2 million dollars, that tax increase will likely stay in place this November. Why? Because any reductions made by the Council can come off the free cash figure instead of the levy at the discretion of the Mayor. So say the courts, so says the Department of Revenue. Even when the Council cut $3.6 million last year, enough to institute real tax relief for the first time in years, the mayor managed to find a way to get a 1.75% tax increase through – and by law the Council was powerless to stop it. Something to consider very carefully in the upcoming November election when you’re voting for the top of the ticket….
So where are the rising costs that are exceeding our revenues? While borrowing costs have leveled out at a rate $2 million higher than just a few years ago, this year’s biggest contributors include an extra $500,000 spent on reorganizing the Public Works Department (allegedly, supposedly to make it more efficient and cost effective in the long run) and 3 percent pay raises that are kicking in for almost every department in fiscal year 2016. On the school side alone, the pay increases will amount to an extra $1.9 million over FY 2015, which is a quarter million dollars more than the entire annual 2.5 percent property tax increase the city can claim legally every year for all potential expenditures. It’s no wonder we’re upside down.
And it’s likely to get worse. Spending over $2 million in cash from previous year to pay for salaries, new hires, and pay increases means the next year, there’s no guarantee the money will be there. Already this cycle the school department is issuing pink slips despite a $1.7 million increase in their annual budget. Other city departments are seeing position go unfunded as pay increases and construction projects consume every available dollar – and more. The current model is a path to bankruptcy (if we’re not technically dabbling with it already). It cannot last.
Sorry fellow residents and taxpayers – no good news in this year’s budget. The New Baker administration has promised to work harder than its predecessor to deliver on local aid and municipal reforms that will alleviate some of these pressures. Let’s hope they deliver.
Christopher Keefe
Westfield City Council
Ward One
Disclaimer: The views expressed in this column are those of the author and not the staff, editor, or publisher of this publication.
