The City of Bellingham adopted its budget this week, and Riley Sweeney put out a blog and pie chart (http://sweeneypolitics.com/2014/12/10/a-simple-walkthrough-of-the-city-of-bellingham-budget/) showing where revenues come from and expenditures go. I think citizens should look into these matters, as in the end it’s *our* budget for our community. As Mayor, I used the triple bottom line to ensure that the budgets met our values and realities; Mayor Linville touts a Lean approach. Both approaches suggest understanding downstream ramifications of budget and other planning efforts. Unfortunately, looking at Sweeney’s blog it’s hard to tell whether the budget meets those metrics or not.
Sweeney’s analysis fails to present much meaningful information, instead obscuring understanding by conflating general fund and capital fund revenues and expenditures. In any given year capital projects (roads, sewers, new municipal buildings such as libraries) often run at three or four times the level of the general fund. Capital projects are funded through separate revenue streams, and their ups-and-downs are not generally indicative of the health of the overall budget.
For that, we need to look at the general fund, and consider not only whether it is balanced this year, but where it is leading us in the future. I did not have the time to undertake a comprehensive analysis, but a cursory examination revealed some issues of concern. Having heard of planned additional hiring in the police department, I decided to look at that budget. What I found is concerning. While the crime rate has largely been flat (down in 2012, up a bit in 2013, down again this year), we are adding substantial costs over time.
What does this mean? Well, over the past four years and projecting forward to the end of this biennial budget, the cost of the police force as a percentage of the city’s General Fund budget has risen from just over 36% of the budget to over 39% by 2017. That’s a significant jump; generally one would expect individual components of government to remain relatively equal, unless there is a compelling reason to provide additional priority. In this case, the numbers suggest that crime is being handled relatively well.
Since Mayor Linville’s first full budget in 2013 (for better or worse, she inherited the lion’s share of the 2012 budget from my administration, as it was passed and adopted, per state law, in December 2011), the police have added 12 positions (through the just adopted budget). Those additions are reducing the City’s ability to fund other aspects of civic life important to the community, and with insufficient discussion. While we want a crime rate of zero, most of us don’t want zero crime if it also means zero parks, zero libraries, and a reduced quality of life. Adding police staff, just like adding staff in any other department, is not just a one-time expense. With existing police pensions not yet fully funded, we are adding new obligations before we’ve fully funded existing ones. Furthermore, we are reducing our ability to address hard times, should they hit again. The hardest thing I did as Mayor was lay people off; we should not be hiring without a plan to fully cover our costs—and budgeting an adequate reserve is an integral piece of that.
We have a smart and dedicated police force in our community. During my term, even as revenues were relatively flat we experienced large drops in overall crime, as the police changed tactics and began more community engagement and also began using more of the emerging tools at their disposal to better understand trends and opportunities to disrupt them. Adding officers–and other budget costs–without understanding on the front end how they will be paid for suggests we are already forgetting the painful experiences of the Great Recession. These costs already result in underfunding the reserve funds by 2017.
And remember, this budget gets a bump of over a million dollars in new B&O receipts from removing St. Joe’s exemption from paying those taxes; absent those revenues this would look even worse. Prudent budgeting might have considered reserving some of those funds for future challenges–though I am glad to see some funding to help address health care for those in need, as this will likely reduce costs to the city over time, and is also ethically the right thing to do.
The bottom line is that fiscal stewardship matters, and an understanding of what’s going on in the city budget requires looking at the General Fund separately from capital expenditures. Hopefully this helps start a conversation.