In my last post, I wrote how the state budget and mandates were affecting local municipal budgets. In this post, I want to discuss Stuart’s upcoming budget for fiscal year 2018. When I look at the trends, I am not pleased with the direction we are heading. I think the City is not looking toward the future but is rather planning no further than the present.
When I look at the total expenditures for 2018, the overall budget is increasing by $172,760. This is a modest increase. However, when delving into individual line items, a different picture emerges. Personnel costs are increasing by $780,064 while operating expenses are decreasing by $169,546 and capital outlays are $483,327 less than 2017. This frightens me because once employees are given raises; it is very difficult to cut pay. Instead, to close future budgets, you lay off employees. Though we do have reserves for the purchase of capital items, once exhausted those funds will have to be replenished.
On the income side, the City has reduced the millage rate a negligible amount from 4.552 to 4.5. This results in a savings of $5 for the median homeowner. The total amount to Stuart’s overall revenue is $110,000. It should be noted that because of increased value of properties, Ad valorem is still projected to increase by $268,000 in 2018. With this projected increase, the City is still collecting $1,000,000 less than it collected in 2009 in the amount of $9,255,000.
As I wrote in an earlier post, next year there will be a new additional $25,000 homestead exemption on the ballot. According to the Property Appraiser’s projections, if passed, this exemption will further decrease Ad valorem tax by an additional $157,000. Further, at some point there will be another recession which will lower property values resulting in less real estate taxes being collected. Because the legislature has enacted complicated rules having to do with how much taxes and millage can rise at any one time, we may once again be forced to impose severe layoffs and reductions in maintenance to our roads and parks because of the City’s inability to levy increases.
I would have preferred that Stuart not cut the millage and instead place the $110,000 into a “rainy day” fund. The median savings per household of $5.00 is in today’s currency the cost of a cup or two of coffee. Further, because of the loss of the $187,000 in rent from the vacating 7-11, any increase in taxes due to property value increases is negated by these two offsets. Unfortunately, I was the only commissioner that thought it imprudent to lower the millage rate this year.
It is my belief that governments should not plan budgets based on political or short sighted goals. Rather, our goal should be to keep both services and taxes on an even keel. Smart and responsible fiscal policies need to cause the least disruption and uncertainty to our taxpayers, residents and businesses. The more we can do that, the better we are serving those stakeholders.