Next week, the City Council will vote on the fiscal 2013 budget. Two choices are before them: The “mayor’s budget” or the version recommended by the city’s Finance Committee.
The mayor’s budget is a political document, and fosters Mayor Josh Cohen’s view of how he responds to budgetary needs while trying to please city employees, labor unions and other constituencies. The Finance Committee, on the other hand, attempts to bring fiscal reality to the mayor’s budget, with a much better approach as the city continues to struggle with cash flow, pension and infrastructure liabilities.
Make no mistake: Annapolis is far from out of the economic woods.
For most residents, the city budget is a mysterious document that impacts city services but, more importantly, dictates how much we will have to pay in property taxes, water and sewer rates and other fees. Beyond that, it is difficult to get residents interested in city finances. Maybe that’s why only a couple of dozen people testified during public hearings on the budget or why only 250 people attended the “budget briefings” hosted by ABC from February through May. And, frankly, the mayor is counting on that apathy.
Cohen must be thinking, “Only a few negative comments; voters get bored with this stuff, I can get my five votes and push this through!” (By the way, for a lesson in how to change the mayor’s mind, bring on the Green Street School PTA.) How can you help? Please contact the mayor and your alderman now. Better, still, send your message to all council members to reject the mayor’s budget and adopt the Finance Committee recommendations, including:
1. The city should outsource refuse collection. Unlike the mayor’s proposal to retain trash collection within the city Department of Public Works, rather than lay off any DPW employees, the city will save almost $12 million over the seven-year contract by having a private company (the same one that handles our recycling) provide that service. To top it off, the contractor will hire 12 DPW employees to handle the work. The city intends to re-deploy other refuse collection staff, so no one will lose their job. A real win-win for the city, and a huge win for taxpayers.
2. The city should increase contributions to the pension fund and OPEB. While the mayor proposed adding $741,000 to the police/fire pension fund, and $100,000 to OPEB (retiree health benefits) the Finance Committee increased the pension contribution to 8.5 percent of payroll: $1.65 million and OPEB to $600,000. This is essential, because the pension fund is currently underfunded by $20-plus million … and it’s not improving. Police and fire personnel should be ecstatic with this decision. OPEB is underfunded by an astronomical $46 million, so even small progress is welcome. The next step is for the city to change from the defined benefit system, which is strangling local and state pensions around the country, and switch to a defined contribution plan, like a 401(k), that most businesses and individuals use, and is being adopted by many cities across the U.S. This is the only way we can ditch a financial albatross that is outdated.
3. The city should reduce the proposed hiring of new employees from 10 to two. This is not the time to expand the city work force. The Finance Committee nixed the long list of new hires, ranging from assistant city attorney, to deputy transportation director and more. Only the Finance Department and the Public Information office will get new personnel. With a population of 38,500, Annapolis has more employees per capita than any city in Maryland. It is high time for the mayor to stop growing – and start reducing – the city staff to match city needs.
4. The city should not layer on an additional property tax increase. With tax assessments about 14 percent lower, the city can retain the same level of property taxes, thanks to the “constant yield” formula. Any increase in property tax has been strongly rejected by the Finance Committee. Still, expect to see the tax rate increase from $.56 per $100 of assessed value to $.64 per $100 to give the same revenue. If your assessment went down, as most property did, your taxes would remain the same.
Now it’s up to each of us to contact our aldermen/alderwomen so we can muster (at least) five votes to defeat the “mayor’s budget” and pass the Finance Committee’s version. You need to do that before Monday.
