WPCNR Quill & Eyeshade. By John F. Bailey. January 28, 2010: The city's revenues are $7.5 Million off while expenitures are up $3 Million due to the police and fire arbitration award. This sets the stage for a combination of department budget cuts, possible new revenue raising fee increases by some departments, a bigger-than-usual tax increase in the 2010-11 budget. The city also has no undesignated fund balance to cover shortfalls next year, if the allowed fund balance  is used this year.

The Mayor’s Budget  & Management Committee chaired by Councilwoman Beth Smayda learned this its first meeting of the new administration Wednesday evening and learned from consultant Eileen (Earl)Bradley, the former Budget Director who resigned in 2002 in the Delfino Administration, that the city’s revenues are down $7,418,315. Expenditures due to the recently arbitration awards to the police and firefighters, are up $2,969,185.

 Ms.Bradley  presented a runthrough projecting that to make up the revenue shortfall alone in the 2010-11 budget, the city would need to increase property taxes 23.49%, an increase of the tax rate from the present $157.06 per $1,000 of assessed valuation to $193.96/assessed valuation ($36.90 increase).

This is in line with White Plains Week and WPCNR projections made weeks ago. Such a increase described hyptothetically by Ms. Bradley Wednesday night,  would make your property tax on a $650,000 assessed (median) home in White Plains go from $2,901 to $3,583, a $682 increase, with a whopper school tax increase to come if the assessment roll takes another expected plunge of  $3 Million.   Bradley emphasized these were projections.

Adding to city woes, Lloyd Tasch, the City Assessor told WPCNR Wednesday there were 1,154 assessment challenges submitted last week, with good more than half from city homeowners. He said it was too early to say whether his prediction of a  $3 Million drop in the assessment roll might rise. The roll is due March 1st.

Over on the other side of town Monday evening, Assistant Superintendent for Business Fred Seiler of the City School District,  when the Operations Budget of the School District was unveiled at last year's level ($80 Million), that any shortfall in revenues occurring in the school district due to lost state aid and a lower assessment roll would be met by an increase in the property tax. The District goal is to keep spending at this year's level of $186 Million.

Eileen Earl Bradley's Revenue Projections

The City is Not Contemplating a 23% Tax Increase.

Ms. Bradley emphasized the administration does not plan to make up the entire revenue gap with a tax increase, because it has given all departments a number figure of how much each department would have to cut from their budgets.

The figure given each department,  Ms. Bradley said was not a percentage, but based on the size of department expenditures

The Departmental budgets would be submitted to the Mayor’s Office. The Budget and Management Committee would be shown what the Mayor’s office has approved in the budgets submitted.

Committee to suggest not shape.

The Committee would be able to make suggestions on the budget only after the budget had been completed by the Mayor’s staff and budget team, the new Commissioner of Finance Michael Genito said in presenting the responsibilities to the new committee.

Ms. Bradley said Mayor Adam Bradley has already determined cuts previous to the departments submitting their budget requests (due February 15), which the Mayor would present to the Common Council for their approval February 1. Those cuts were not explained to the Budget and Management Committee, and none of them asked what they were.

Doing a Little Checkin

Mr. Genito said the great drop in the sales tax receipts in December is being looked into by the city. He and Ms. Bradley agreed that generally the December figure adjusts the estimates of the previous two months  and is a "real number," so they are very hopeful that several retailers simply filed their checks late and that perhaps the 1.3 Million drop in the December figures would show up in January. They are exploring this quietly with the Department of Taxation and Finance. The sales tax collection for December, $3,024,009,Genito confirmed was the worst since 2000-2001.

It should be pointed out though, that Ms. Bradley’s projection assumes the sales tax hits $45 Million,  she told me. At the current steady 11% decline the city is showing through the first six months of the year, this projects if continued a $42 Million sales tax, not $45 Million.

Revenue under-performers are lead by the sales tax (down$2,350,000), Taxi medallions of which none have been sold to date, ($1.2 Million); Mortgage Tax ($800,000).

Fund Balance Problem

Bradley highlighted another problem, if the present undesignated fund balance is used to fund this year’s shortfall, there will be no fund balance  to allocate for 2010-11. The idea Mayor Adam Bradley has explored with County Legislator Peter Harckham to raise sales tax an undetermined amount to replenish fund balance would go a ways to solving that problem. Mr. Bradley has not yet responded to a WPCNR e-mail as to the details of how the new Mayor sees this working to replenish the missing fund balance.

Tim Sheehan, a member of the committee, after the sales tax discussion said that the city right now had to take drastic action with the unions (police and fire union contracts beginning in 2010-11, have to begin negotiations soon) and demand wage cuts in exchange for preserving jobs, or continuing raises with the understanding there would be layoffs, a policy Harrison pursued.

The Committee said they wanted the city to explore health cost sharing for the future, consolidating services, water rates.

Ms. Bradley emphasized that any concessions in health costs with the unions would only affect years way down the road and that getting the city out of this present budget crisis would take several years, a return to sound conservative practices, and reduction in the labor force.

The committee also suggested a citywide manpower analysis. Ms. Bradley said she would have to think about that because it was a tremendous undertaking.

Mayor Bradley made a brief appearance at the beginning of the meeting, thanking the members for their participation and saying how important the committee was, then left the meeting.