Last week, the Chamber of Commerce took a strong position regarding the City of Owensboro’s 2017-18 budget in which the city staff proposed the largest tax increase in our community’s history.
For the past few weeks, many chamber board members and committee members have spent hours and hours poring through financials in order to have a firm grasp on the current financial status of the city. After careful thought and deliberation, we arrived at our position, sent the position to our members and now we share it with you.
ONE YEAR BUDGET
First, there has been no valid reason given to raise revenue for a four year projected loss based on assumptions and unknowns. We applaud Mayor Watson and other elected officials who have stated as much. We recommend adopting an annual budget based on annual projections. With the annual budget approach, which is the standard accepted form of budgeting for cities, the deficit using the city staff presentation numbers would be $11,930,357.
Using this year’s deficit number as a guidepost, the actual deficit would seem to be closer to $2 million if no additional spending were instituted.
ONE DOLLAR OF INTERNAL CUTS FOR EVERY ONE DOLLAR IN TAX INCREASE
Second, there are few real internal cuts in this year’s budget proposal. We believe that for every new dollar taken from the taxpayer, there should be a dollar cut in REAL Expenses (not deferred spending). We call it the “One for One Plan.” It is a good faith partnership between those who pay taxes and those who are stewards of our money.
HIGHER TAXES DRIVE GROWTH OUTISDE CITY LIMITS
Third, if we continue to inflate taxes inside our city limits, we are going to drive growth away from our core, a major contradiction to our community’s goals of implementing an effective placemaking strategy.
USE COMMON-SENSE BUSINESS PRACTICES
We understand that public organizations are unique in many ways. But the following are some areas where we believe common sense business practices should be implemented:
Businesses do not add expense items based on PROJECTED activity. This budget has an inordinate amount of REAL expenses for PROJECTED growth.
Businesses do not give raises when facing a deficit. No cost of living adjustment for non-public safety employees. No step increases for non-public safety until budget crisis is over.
Businesses adopt many other common sense cost-savings approaches during times of financial crises or lean years. The following are some methods which our members use to save money before they raise prices or fees for service:
Furlough days — Require employees, excluding public safety and sanitation, to take furlough days throughout the year. Effective management ensures that furloughs do not impede service.
Require employee spouses to take their employer health insurance, if offered.
Adjust deductible on employee health insurance.
Eliminate redundancies in positions.
Outsourcing of non-critical functions that could be done cheaper by private sector.
Executive pay cuts — executive pay cuts are a standard practice for businesses in crises.
We estimate that our recommendations would save well over $5 million.
In closing, we appreciate the courage it took for Mayor Watson and the city commission to step up to lead our community. We appreciate the mayor and commissioners who we know are trying to get the answers and make good, sound decisions. We know that these are tough decisions.
We understand that some adjustment in revenue may be necessary. If it is necessary, we ask that there be a sunset provision for next year. We ask for the city commission to meet the business owners and the people in our community half way.
We feel the One for One does just that.
Please join us tomorrow night at 5 p.m. at city hall.
By Mark Martin Advocacy Chair 2015 Board Chair