WeShare

We are starting the budget process a little earlier this year.  In the past, our process usually was underway shortly after the beginning of the calendar year as each department began preparing its proposed budget.  I have asked Stewart Taylor, our Finance Director, to convene a Budget Task Force this year that is beginning its work this week.

The City is not facing an immediate fiscal crisis, but our projections for the General Fund beyond the coming year are not positive.  Our property tax revenues and other sources of income are not increasing as quickly as our costs.  Most of us understand that health insurance costs have been increasing at a rate approaching ten percent in recent years and that wages have been going up in excess of the rate of inflation.  The services we provide depend on people; and if our personnel costs increase more quickly than our income, we have a problem.

It’s difficult for cities to cut services because our citizens rely on them, and layoffs hurt the organization as well as the affected employees.  A recent example of a proposed service cut is the closure of the wading pool at Takena Park.  The pool is something like 50 years old and retrofitting it to meet current health standards would be expensive.  The announcement of the proposed closure has already generated some nasty comments in a letter to the editor and an editorial suggesting the pool remain open and that new ones be constructed in other parks.  If closing a 50-year-old wading pool that serves less than a 1,000 people in the summer months generates controversy, it’s not difficult to imagine that cutting services that affect more people will create substantially greater discontent.

Raising taxes is one option the City Council could consider to increase revenue and sustain services.  The Oregon State Legislature chose this route in passing a new business tax and a gas tax that are now both the subject of referendum campaigns.  There is a strong likelihood that neither tax will gain public approval at a time when unemployment is greater than ten percent.  It’s hard to believe local voters will support a tax increase when the county has one of the higher unemployment rates in the state.

I don’t think there is a painless solution to the financial problem we face.  We will need to cut costs and continue to look for ways to save resources.  I will be asking the Budget Task Force to build a foundation for next year’s budget proposal by looking at savings that will have the least impact on services.  We may need to take some uncomfortable steps in the short-term that can be revisited in more prosperous times.

We have great talent available to work on this problem, and I’m confident we can develop a responsible budget that will sustain services and minimize the need for cuts.  I look forward to hearing from the Task Force in the months ahead and taking advantage of their good work.  Any employee should feel free to submit suggestions either to a Task Force member, Stewart, or me.