Less than two years after voting for a 13% property tax increase and a year after a 2.3% property tax decrease, the City of Tallahassee professional staff will present the City Commission with a proposed budget that is $4.5 million in the hole for fiscal year 2018.
The budget workshop presentation, scheduled for next week, will also include projections that show budget deficits of approximately $4 million for the next five years.
The proposed budget deficit for 2018 comes after taking into consideration a $3 million increase in property taxes, fees and utility transfers for fiscal year 2018.
The largest contributor to the general fund budget shortfall in 2018 is personnel services, with an increase of $4.9 million, which is 5.8% over fiscal year 2017.
This increase is driven by 3.0% merit increase ($1.8 million), increases in the pension cost for employees ($2.5 million) and an estimated increase of 5% in health costs ($520,000). When comparing revenues to expenditures, expenditures exceed revenues by $4.5 million.
The agenda item states:
Based upon a broad set of assumptions that are described in this item, preliminary estimates for the Fiscal Year 2018 (FY18) currently estimate that general fund expenditures exceed revenues by $4.5 million. Staff is seeking guidance and direction from the City Commission regarding conceptual approaches and options available to close this gap while continuing to look at efficiencies that have been gained from the two City Manager reorganizations, while maintaining or improving upon service levels and priorities.
However, the city staff informs the elected officials that the “efficiencies implemented in FY 2016 and FY 2017 already provided opportunities for cost savings, and these have been included in projections for FY 2018.”
The city staff reports that property taxes will increase $1.4 million and utility taxes on electricity, water and gas will increase by $500,000. Also, utility revenues transferred to the general fund will increase by $1 million.
At the budget workshop the elected officials will be provided with options to address the shortfall. These options will include functional consolidations and workforce reductions, in-sourcing and outsourcing, and employee benefit cost sharing.
The city’s review of community priorities found that police and public safety continues to be the highest priority where citizens want to see their tax payer dollars invested.
Also, the report states that “overall, residents are happy with the quality of services provided.”