Asheville’s budget for the next fiscal year will come in at around $135 million, Chief Financial Officer Ben Durant predicts. And if City Council approves the budget he’ll propose on May 12, it will be balanced, with revenues equaling expenditures.
That’s an accomplishment even in a good year, but all the more so given that as recently as last November, Durant was projecting a roughly $5 million shortfall due to the national economic sinkhole that dragged down sales taxes and took the wind out of property-tax growth.
Closing that gap has been no mean feat, and Durant has put in an appearance at every Council meeting since January to give updates. The news hasn’t always been good: So far, sales-tax numbers have came in $2 million lower than projected, forcing Durant and his financial team to dig ever deeper for cuts. We won’t know how the March figures look till the state releases them in May.
“This is by far the toughest budget I’ve dealt with,” says Durant. “I’ve never seen [sales-tax revenues] decline that significantly.”
Council’s final vote won’t come till June (the new fiscal year begins July 1), but the biggest political challenge may turn out to be cutting funding or raising fees for programs near and dear to Council members’ hearts. The city has avoided the political land mine of increased property taxes, but several of Durant’s suggested adjustments fly in the face of the Strategic Operating Plan, a list of priorities and goals established each year during Council’s January retreat.
On April 14, Council members approved a new fee structure for city services that, besides a 4 percent bump in water bills and increases in building-inspection and park fees, also raises the cost of curbside recycling from $1.32 to $2.65 per month. Although the increase works out to less than $1.50 per residence—and actually restores the program to its original unsubsidized status—Council member Brownie Newman took issue with it, saying it impacts a beneficial program and disproportionately affects private households.
Mayor Terry Bellamy, meanwhile, maintains that since the slumping economy is already hitting individuals and businesses as well as city revenues, she’s opposed to raising fees at all. “I don’t think this is the time right now,” she says. “I think it sends the wrong message.”
But a bigger sticking point for Newman will be a proposed $300,000 cut in the city’s annual contribution to the Housing Trust Fund. That’s 50 percent of what the city has been putting into the fund each year to provide low-interest loans to developers who agree to build affordable housing. Durant had initially suggested forgoing this year’s contribution altogether, but Council members’ strong objections made him back off.
Newman feels that’s still too big a hit for a program that successive City Councils have nurtured to help maintain Asheville’s affordable-housing stock.
“Cutting it in half is way too much,” he asserts, and Council member Robin Cape is of the same mind. “That [fund] is crucial to what we are doing and what we are trying to do,” she notes. “It’s not like we’re losing $300,000: It represents millions in affordable housing.”
The belt-tightening also entails diverting some funding—including money targeted for Civic Center improvements, a longtime priority for Vice Mayor Jan Davis.
“That is a bother,” he concedes, though a bigger concern for him is cutting back a four-year push to make Police and Fire Department wages competitive with those in other cities. But the reality, says Davis, is that the situation is dire, and he won’t second-guess Durant’s call.
“That one really hurts,” Davis notes. “But I’m not going to stand up and say it’s the wrong thing to do.”