Last week was a busy one on the budget front with a Budget & Finance committee meeting on Wednesday, an informal budget discussion Thursday and a work session on Friday. We’ve now plowed through the entire operating budget and the administration only has utility and capital budgets left to present. That doesn’t mean we’re settled on the operating side yet.
First off, as you may have read in this morning’s paper, the editorial suggests the mayor will seek $10 million in additional cuts if we don’t approve his plan to refinance (technically it’s called a “refunding”) a portion of the city’s 2010 debt service. I’m not sure the editorial is correct; here’s why. When the administration first presented its proposed budget many (including, I think, administration officials) felt the debt refunding would free up tax dollars to support the operating budget. At the aforementioned Wednesday committee meeting we determined that was not the case. Here’s how it would actually function:
To put this in simpler terms, the administration’s proposal is akin to using your Visa card to pay your American Express bill – you don’t have to spend your paycheck to cover your bills, but you still owe the money and will ultimately pay more interest. That doesn’t necessarily make it a bad idea if you’re short of cash but as a “debtophobe” my skepticism is steadily growing.
In previous conversations I didn’t fully understand the mechanics of this transaction and thought the debt “refunding” was intended to provide support to the operating budget. As I mentioned, I’m pretty sure administration officials thought the same thing so I suspect that was the mayor’s interpretation too. The rub here is that you cannot take debt service revenue collected outside the tax cap and roll it under the cap – that would violate the city’s charter. In other words, the only thing the “refunding” would accomplish is tax reductions in 2010 & 2011, followed by greater off-setting tax increases for the following 16 years. Given that I’m wondering if, once this is more thoroughly explained, the mayor will stick to the position cited in today’s editorial? We’ll see.
Many other concerns about the operating budget revolve around the near-elimination of grants to non-profits that provide community services. Specific entities about which I’ve heard Assembly members express support include:
Other than the occasional greeting it’s been several months since I heard from the mayor personally – the last time was when he called to tell me he didn’t need to be lobbied on the equal rights ordinance and therefore wouldn’t meet with me – but I’ve been told that he’ll only accept additions to the budget if they’re coupled with off-setting cuts. I don’t know if my resolution limiting Anchorage School District use of property tax dollars (which Superintendent Comeau helped develop) counts but I expect it’ll save taxpayers about $10 million in 2010 so maybe that will create some flexibility.
Our first public hearing on the budget occurs this Tuesday, October 27, with the second slated for the following Tuesday, November 3. That’s your chance to speak about any of the above or other topics you’ve addressed to me – libraries, domestic violence and sexual assault prevention, bus fares, bus routes and an Eagle River fire station, to name a few. Those comments will help guide the discussion as we negotiate the final budget, due for a November 17 vote. I look forward to hearing from and seeing you.
P.S. to Steven, the gentleman who slipped me a very nice note at Cafe del Mundo on Thursday, my thanks for your kind words.
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