Asheville’s most chaotic budget season in many years appears to have come to a close June 25, though not without some further turmoil.
Amid predictions of financial doom due to uncertainty concerning what state legislators would do, Council signed off on its own spending plan for the fiscal year beginning July 1. Various proposed state laws would reduce the city’s revenue; meanwhile, the House and Senate had yet to reconcile their conflicting state budgets.
At the June 11 public hearing, city officials had presented a budget that relied on Asheville’s forming a joint recreation authority with Buncombe County (see “Budget Brandishing,” June 19 Xpress). The projected $2.5 million in savings was supposed to leverage an $11 million loan that would fund a wish list of projects, including affordable housing, parking decks and Asheville Art Museum renovations.
But that scenario relied on pending state legislation that would have empowered local governments to create such an entity. The bill still hasn’t passed, but after a recent version specifically excluded cities and towns from joining, Council directed staff to draw up plans for a property-tax increase to fund those projects instead.
The increase, 4 cents per $100 of assessed value, breaks down as follows: 1 cent to offset a decline in property values, 1 cent to beef up road and other maintenance, and 2 cents to fund the wish list.
Defending the tax increase (the city's first significant one since 1995), Public Works Director Cathy Ball said: “The emphasis is on what we can do ourselves to have control of our destiny. How can we be less reliant on outside forces to make Asheville successful?”
The extra money, noted Ball, will enable the city to replace its roads every 35 years instead of every 65, a timeline she called “unacceptable: The roads continue to become even worse.” And wish-list items, continued Ball, will eventually increase revenue, though she cautioned that they won’t really start paying off for another two to four years.
Council members also depicted the increase as a wise and necessary investment. Marc Hunt said the improvements would help Asheville “attract industry and better-paying jobs.” Cecil Bothwell called it “building for the future.” Jan Davis said that facing a difficult situation, the budget had “taken the bull by the horns.”
And Gordon Smith, asserting that the city had made ends meet during the recession by “cutting and cutting and freezing,” added that it's now time to invest in Asheville’s needs.
Vote first, talk later
But a marked departure from protocol sparked confusion and controversy.
Normally, if Council members significantly change a proposal after holding a public hearing but before before voting on it, they'll allow public comment on the changes. This time, Mayor Terry Bellamy quickly called for a vote, inviting the public to speak only after the budget had been unanimously approved.
Former Mayor Ken Michalove deplored the $2 million earmarked for the Asheville Art Museum, saying the nonprofit’s operations weren’t sufficiently transparent. He challenged its claim that the city funding would enable the museum to leverage $20 million in donations.
"If the private sector believed in the project, they would have funded it by now," argued Michalove, saying that he’d recently resigned his position as a consultant for Pack Place so he could speak freely about the matter. "The art museum,” he charged, “has been unnecessarily secretive in its dealings with the Pack Place board.”
Although the budget had already been approved at that point, Council could still revise or amend it.
Earlier, Ball had said the $2 million would pay for basic improvements to the building, which the city owns.
Asked about the procedural change the next day, City Clerk Maggie Burleson acknowledged that holding a vote before public comment is highly unusual, saying, “I was confused too.”
Fly in the ointment
Even now, however, plenty of questions remain about the city’s “final” budget. Faced with a June 30 deadline and no clear idea what lawmakers in Raleigh will decide, city staff assumed that the state’s final spending plan would be closer to what the House approved, rather than the Senate version (which calls for even deeper cuts).
If that assumption proves wrong, Council could reconvene to amend the budget as needed, noted City Attorney Bob Oast. Only the tax rate is set in stone for the coming year.
As Smith put it, “There's still a lot of uncertainty about what's going to hit us.”
— David Forbes can be reached at 251-1333, ext. 137, or email@example.com.