Budget breathing room?
The first of three and perhaps more city budget hearings will be held this Friday starting at 5 p.m. when the mayor presents his $165 million school budget, which is $2 million less than what schools requested. Overall, Mayor Scott Avedisian is asking the City Council to approve a $310.5 million budget.
Judging from the mood and comments of some council members, they are likely to cut even more from the school request. To be sure council members and members of the public as well as the Warwick Teachers Union will drill down into the numbers. Friday promises to be a long night and unfortunately, we fear, a fair amount of the questioning will be to further personal agendas, not Warwick schools or the welfare of taxpayers.
With the unveiling of the mayor’s budget and his proposal to use $3 million from unrestricted reserves came the revelation that the city’s rainy day fund is now about $18.5 million. That’s an increase of $10 million from last year. It is by far the biggest single-year surplus in the city’s history, pushing the reserve account to more than it has ever been. In addition, the city expects to finish the current fiscal year in the black with a $2 million surplus.
How did it happen?
The administration credits an improved economy, which has resulted in a rate of tax collection higher than predicted. Other factors have come into play including the resolution of tax law suits and reduction in property value abatements. This is good news and definitely gives room for the council to discuss how much the city should carry in reserves. What level of reserves should be used to provide tax relief, or might some of it be used to finance program and projects?
A third option would be to not touch the surplus, for if used to lower taxes or supplement spending, it becomes a structural deficit for the next fiscal year. This could mean higher taxes in years to come in order to sustain operations unless the tax base was to grow or Warwick was to gain added state aid and revenues for operations.
We expect to hear those points argued over the next week.
There is sure to be some indignation too from council members who sought to cut the mayor’s proposed tax rates last year only to find they didn’t have the votes to override his veto. It’s grist for the blame game, but the “I told you so” declarations won’t get us anywhere.
We started this commentary with schools. Of all department budgets that promises to be the most debated because of the mayor’s recommendation to increase funding, albeit less they requested, and the agreement he has reached with the school administration to reserve most of that increase for a yet unsettled teacher contract. Certain to come into play, too is the ongoing issue of how to address our aging schools and declining school enrollment.
As we know, but have delayed, more schools need to close. A school capital campaign to renovate buildings that would require bonding has also been placed on the back burner.
Indeed, the surplus eases the strain. There’s some room without relying entirely on higher taxes as the mayor and council address the city’s short and long-range goals.