Finally, a City Budget Deal
Libraries are safe in new Santa Fe budget that increases fees for parks/rec and downtown parkingLocal NewsWednesday, May 25, 2016
Santa Fe’s governing body tonight approved the first balanced budget many councilors have seen in their terms in office, using natural attrition rates, increased fees and a gross receipts tax to close a $15 million shortfall. Looking ahead, several councilors promised in future years to see what has been a thorny process start earlier and allow for more transparency and public input.
"We have the opportunity tonight to vote on a budget that is balanced in every way … something that hasn’t necessarily been done in my tenure as a city councilor, and quite frankly, it was done by lots of hard work and lots of smart people," Councilor Carmichael Dominguez, who chairs the city’s finance committee, said after making a motion to approve the budget with clarifications—namely, that the hours will not be cut for city libraries, a topic that frequently appeared in the roughly 40 minutes of public comment.
The process, Dominguez added, also entailed nearly 30 hours of budget hearings, as well as individual meetings with staff.
Councilors were also quick to point out that because of additional reductions in payments from the state to infill tax revenue lost when changes were made to the gross receipts tax for food, the city will once again face a budget shortfall next year.
The budget for fiscal year 2016-17 is the first since the recession to balance the budget and avoiding drawing from reserves, one-time income or capital funds to cover operations, according to a summary prepared by the city manager. In every fund except the Airport Fund, which is paying for airport renovations and a management overhaul, operating revenues cover expenses.
Total recurring operating revenues of $320 million exceed planned expenditures by more than $14 million, according to the budget, which should allow $12 million to go to the capital budget for brick-and-mortar projects. The general fund would also see a reserve that exceeds the state-mandated minimum and nearly meets the governing body’s goal of 10 percent.
Most of the $5.3 million in cuts to operations costs come from personnel attrition.
“An easier way to explain the attrition rate, which those of us in finance committee all struggled with, is that it’s an element of shared sacrifice, and it’s based on historic information,” said Councilor Michael Harris. The aim is to allow emptied positions to remain as such, but in a targeted way so no city services suffer.
“We need to understand that all departments make sacrifices, and unlike what we heard, I don’t think we’re dying a slow death," Harris said. "I think that in fact, we’re putting ourselves back on very solid ground, and we can really start to improve our practices.”
The councilor was responding to comments from Chainbreaker Collective member Nohemy Bojorquez-Flores, who told councilors, “We are grateful that no cuts large enough to see limbs falling to the ground are being made, but the small amounts of cuts made to every department are the equivalent of being stabbed a thousand times with a needle. It will slowly bleed our community dry.”
Balancing the budget is also aided by moving $7 million in annual gross receipts tax revenue from the water utility, as a new ¼ percent municipal GRT will take effect Jan. 1, concurrent with a rollback on the ¼ percent water capital outlay GRT—for a net zero effect at the cash register.
The city will also increase fees and service charges for the General Fund, Water Utility Franchise fee, and non-general fund fees, including higher downtown parking fees (meters will go from $1 to $2 per hour) to provide an estimated $2.1 million in revenue. Increasing parking fees is expected to generate a total of $1.2 million in revenue and spare subsidizing that department by $900,000. Higher parks and recreation fees will generate another $200,000, and increasing land use and development fees will add $1.625 million. Recently passed reforms to the short-term rental ordinance are anticipated to increase lodgers tax and gross receipts tax revenue by $1 million.
The ongoing reliance on gross receipts tax has been named repeatedly throughout this process by councilors and social justice advocates as a regressive tax that targets the city’s poorest residents, and it appeared again among the forward-looking comments made by councilors as they passed the mic to make speeches on this year’s budget.
Councilors also spoke to a need for increased transparency and public involvement in this process, to have the budget completed sooner and allow the public more opportunity to weigh in on it.
“I think we all realize the need to start this process earlier, and we have to really insist that not only we start the process early but we identify early ways for public to weigh in,” Councilor Joseph Maestas said. “I want to make sure we have the public involved in that process so they can really come away with a sense of ownership in developing a shared vision for their community.”
The budget does not address the pending sunset of the state’s “hold harmless” payments, the effect of which will be to see another budget shortfall next year of $1.4 million, and $700,000 each year to follow until those payments fully taper off in 2030.
“All of this gets us to zero. We have to leap immediately into work to make sure we can shore up the future of our budget for years to come, so the work doesn’t stop here,” Dominguez said. “We’ll immediately be moving into the next budget cycle.”