"As we enter the third year of what has become the country's worst economic downturn since the Great Depression, it is fair to say that local governments are implementing unprecedented changes to cope with the financial crisis that represent a different way of doing business."
Those words, penned by City Manager Gary Jackson, begin the official report on the city of Asheville's proposed budget for the 2010-11 fiscal year. But Jackson didn't stop there.
"As you are aware, revenues have been down in all areas — local and state alike — and there are no reliable trends that can accurately predict when we can expect full economic recovery. In fact, many experts believe that our current financial reality might be one that is here to stay well into the foreseeable future.
The "new normal" is a term city staff have used repeatedly in recent months when discussing next year's budget, and struggling with that new reality has produced some of the longer and more contentious budget negotiations in memory. Since January, Asheville City Council members have struggled to close a projected $5 million budget gap, and after reaching some agreement on how make up the bulk of it, they've wrestled, often with little consensus, on how to address the remaining $1 million shortfall.
What's emerged from all that wrangling, though still subject to change, reflects a series of compromises. Property taxes aren't being raised, though some Council members had suggested this as a way to close the gap while preserving current services. And unlike the two previous years, the city isn't tapping its reserve fund. Cuts in mass transit were mostly avoided. Water fees will increase, but not as much as originally proposed. City staff is essentially intact, but few can expect pay raises. And while fees will no longer be waived for many festivals, Asheville's best-known special events will still receive some in-kind support.
So, what is getting the ax?
Selective cuts
Employee benefits and compensation account for well over half the budget, and the biggest proposed reduction — $2.29 million, all told — targets overtime, temporary and contract work, plus travel and training for city employees. Three other major cuts — a selective hiring freeze ($878,000), a salary freeze for higher-paid staff ($340,000) and an adjustment to the health-care plan ($300,000) — also affect city employees.
Some services did take a hit: Restricting community-center hours, scaling back brush collection to once a month and reducing funding to outside agencies is projected to save $975,000. The Asheville Film Festival is on hold, and the city may sell or discontinue it. The festivals budget as a whole loses $22,000, and except for six "core" events (including the drum circle and Downtown After 5), fee exemptions have been sharply curtailed.
Elephants in the room
Another popular expression during the budget wrangling was "the elephant in the room," a reference to underlying or unacknowledged fiscal issues. But like the blind men describing the pachyderm, Council members seem to differ significantly concerning the budgetary beast's perceived shape.
"We're faced with the question of whether we become a lower-service city or we decide that we want to raise taxes," Council member Cecil Bothwell told Xpress. "The general consensus on Council seems to be that raising taxes is absolutely off the table. It is not with me. It seems to me that city governments do good things, and it can be worth paying a little more to get those things."
During budget deliberations, Bothwell broached the idea of a 1-cent increase per $100 of property value, which would generate roughly $1 million while costing the average taxpayer about $20 a year, according to city staff.
"From what I hear from people about wanting sidewalks, for example, I think most people would pay $20 for that; it's not a big torment," notes Bothwell. "When we frame it as 'increased taxes,' everybody flips out, but if you talk about $20 a year, it's different. I think this recession we've come into isn't going to change substantially for years. I think we're going to be faced with cutting services incrementally. Would people prefer to see a tax increase or would they prefer to see festivals end?"
Council member Bill Russell, however, strongly opposed raising taxes during the deliberations and voted against some increases, including the water fee hike.
"In the '90s and the first decade of this century, Asheville was riding this wave of increased property values and increasing revenue," he notes. "We just allowed the government and city services to expand. That's just not a sustainable model, especially when you go through the worst recession we've had in a while.
"I think if we analyzed all the services we do, we put a lot of money into staffing, into health care. We need to … make sure all the positions we have out there are truly necessary. Spending $100,000 on a sidewalk is different from spending $100,000 on a salaried position."
Asheville's taxes "are really high," says Russell, adding with a chuckle, "I don't think anyone would say our taxes were too low — except Cecil Bothwell."
In a close vote on the 5 percent water-fee increase, Council member Esther Manheimer criticized some colleagues' reluctance to either make cuts or raise revenues, arguing, "We have to start saying 'yes' to something" to balance the budget.
"I saw that as having your cake and eating it too," she explains.
But Manheimer now believes Council has taken the right course. Indeed, whatever their disagreements, many Council members seem broadly supportive of the proposed budget, praising staff for their work in an exceptionally tough year.
"I think there's an unwillingness, absolutely, to raise taxes but a willingness to raise fees, and that's good, within reason: They do affect more people who are using a particular service. There's a lot of different ways to balance a budget," she observes. "It's never fun to cut $5 million, but I think these cuts are well-considered; they're not knee-jerk."
Russell, meanwhile, calls it "a well-balanced trimming process that, quite frankly, hurt some departments and will be felt more than in the past. But overall, I think it was certainly a good process; it was proactive."
Priorities
The proposed festival cutbacks sparked complaints from representatives of events such as the Martin Luther King Jr. Day celebrations, the Memory Walk and Downtown After 5. Kitty Love of Arts 2 People echoed others in telling Council "Now is not the time to cut cultural events." Council members sympathetic to mass transit or business interests made similar comments throughout the budget deliberations.
Manheimer, though, believes the budget spreads the cuts "across the board. I don't think one area's been singled out. Obviously, those areas that aren't essential services, such as garbage, water, fire, police, are going to be scrutinized closely. In the eyes of many, subsidizing festivals is obviously a luxury."
Bothwell favors preserving "the services that are broad-based … like transit. In a bad economy, more people will ride the bus. Obviously, police and fire: not much wiggle room on those. We can cut back to every other week on garbage collection. Truthfully, the festivals and all are great. But I don't see … how one could justify cutting transit and funding a festival."
Russell, meanwhile, thinks the festivals need to cover more of their own costs. "When I took over as chair of the Finance Committee two-and-a-half years ago, any of these groups could come to the city … and the city would waive all these fees," he recalls. "That's just not good business sense. There are guidelines now for the major anchor events; there's a ranking scale. That takes politics out of it."
Unlike Bothwell, Russell feels "We have to take a serious look at transit. Expenses have nearly doubled: It's getting close to $6 million a year, and it only brings in $1 million. That's not a sustainable model." The city's health-care plan, he notes, "is also a target," adding that items such as parks are enjoyed by the public and relatively inexpensive.
What's next?
Council members will hear public opinion at their May 25 meeting before casting a final vote on June 22.
Bothwell, however, believes the city is facing a number of what he calls "ticking time bombs": repairs to the City Building's roof and the inability of both the Pack Square Conservancy and the Grove Arcade Public Market Foundation to pay back their respective debts. "I don't know how we're going to deal with that, but I think we're going to raise taxes or radically cut services," he predicts.
Russell thinks the city needs to reconsider rules and regulations that increase costs. "The city has so many silly little rules, like sending the fire truck out to check every time someone plugs in a PA system at an outdoor event," he points out. "Therefore we're going to have to charge more to recover the cost. There are too many rules and regulations that shouldn't be there, but [changing] that doesn't fly well in Asheville: We like our rules."
But whatever lies ahead, Manheimer feels good about the proposed budget. Constituents, she says, are "pretty pleased we've been able to slim down the budget without raising taxes and without having too much of a noticeable impact on services," she says. "But going forward, we're hoping there's going to be room for some much-needed capital improvements."
David Forbes can be reached at dforbes@mountainx.com or at 251-1333, ext. 137.
@ Mr. Bothwell
Problem is, if the 1% increase would go to sidewalk building and maintenance that would be good. If it could be earmarked to that public need.
But my guess, and observation is it would get lost in the general fund. My neighborhood hasn’t had maintenance done in decades….and I’m sure that’s true of most neighborhood sidewalks in this city.
The high flying halcyon days of the past are gone…they may be gone for good. We need to tighten the belts.
I think Madame Dial’s critic of money being lost in the general fund is quite accurate. Such irresponsible spending also played a part in the institution of the Sullivan Acts.
Another problem with water hike-Bothwell’s proposal is that it’s not accurate. Oh sure, it’s just $20…this time. Let’s not forget that it’s “just another $20” on top of a 5% rate hike in the water rate, and that property taxes increase with property value.
I love that we sit around and complain that the job base is eroding, and the only ideas we come up make it more expensive for businesses to start up in Asheville.
Mr. Bothwell said he would be content to be a one term councilman, and it he keeps advocating raising taxes, he may get his wish.
J, I’d note that the 5 percent hike is less than $1 per month on the average bill. So you’re complaining about $32, which is not nothing, but is 8 lattes or four fast food meals, which is not much.
D, the easy way to dedicate tax revenue to a specific project (or set of projects) is through a bond, and the necessary referendum permits the taxpayers to demonstrate their preference.
I concur with Politics Watcher.
Bothwell loves to keep talking about “the average bill”. Okay, what about above average bills? What about families of five, why are they penalized? Their costs go way up compared to “the average”.
A while back on ScruHoo, Bothwell even made the comment that he knew that restaurants would pass on the higher water costs to the consumer. This means that the consumers are paying for this water tax hike (and will be paying for the extra penny per $1,000). In other words, they’re paying for this twice over: once for themselves and once for the business they consume.
Secondly, Asheville has odd demographics. We have seasonal residents who migrate to warmer weather in the winters and we have college kids who dissipate to all parts of the globe during December and the summers. So if we really want to talk about “the average” for the water rate hike, we’re talking about a disproportionately low number. A more interesting number to discuss would be the costs to a family of four.
I found an interesting video, and I would just love for someone to ask Mr. Bothwell about it.
http://www.youtube.com/watch?v=mTNl_GTFOp4&feature=related
Matt, irrelevant.
J, families of five decided to be families of five. It isn’t the community’s responsibility to underwrite personal choices. Sure, an average full-time, family of four water bill would be more accurate to compare full time residential bills.
Let’s make a wild guess and say that an average family of four uses three times the city average use. Now we’re at $36 per year. That’s dinner out for the family of four, once. Maybe.
The larger point is simply this: we can choose to be a lower service city or a higher tax city. I didn’t make that up, I don’t like it any more than anyone else, but it’s the truth. Government accomplishes things that none of us can do alone, no matter how independent we imagine we can be. Roads? Fire protection? Police enforcement? Garbage?
I’ve lived in communities with no garbage collection and people toss their junk into the nearest ravine. Is that the solution? Will you watch your house burn down and applaud the fact that you didn’t want to pay a few more dollars per year to support fire protection?
When I realistically suggest that we have to make choices, my critics unrealistically proclaim that I’m somehow in FAVOR of raising taxes for some weirdly unspecified reasons. (Ah, yes! Cecil just loves the idea that people will pay more money! What an evil genius he must be!)
Hey, if the people of Asheville vote to disband the fire department, quit collecting garbage, let the water system fall into total disrepair, it is the right of the people to vote that way. I’ve got no agenda beyond trying to keep Asheville safe, healthy and prosperous. But quibbling over $50 or $100 dollars per year, per household, is simply playing stupid political games, and has nothing to do with the serious choices facing our community.
So whatever happened to DP Benefits? Has council caved into Bellamy’s bigotry and given up?
Sage, we’ve asked Staff to come back with details. Best guess is that DP benefits, if support remains as it was, will commence in FY 2011 (that is, July 1, 2011). Still on track as far as I can see.
Good. Thanks for the update!
It’s unfortunate that we are facing such hard choices as a city. But I appreciate the work of staff and council to explore all the options (including raising taxes) and to have a healthy debate on these issues. And I appreciate the reporter’s work to keep us informed. Even in lean times, we have a lot to be thankful for in this town–and good city government and local media are high on the list.
“J, families of five decided to be families of five. It isn’t the community’s responsibility to underwrite personal choices. Sure, an average full-time, family of four water bill would be more accurate to compare full time residential bills.”
Cecil,I am liking you on council more and more.
It appears that in the 08-09 budget, the city subsidized the golf course am I correct on this and is that the case for this years budget, if so why is the city in the golf business? and with golf decreasing in popularity is it time to unload the municipal course?
JMAC, the current proposal is for the golf course to be self-financed in FY 2010-11. It is expected to generate about $920,000 in greens fees and retail sales.
I’m not clear why the City is in the golf business either, but as long as it can maintain as a self-sustaining enterprise, I don’t have a strong inclination to unload it.
SELL the golf course and make it pay taxes. Even a self financing entity like the golf course, airport, or Civic Center is still tax exempt as public, where if they were sold they would be generating taxes. So they are still losing money in terms of opportunity cost.
Also what’s this with water FEES??? Only RATES motivate consevation, fees do not.
Another advantage of selling the golf course is that if this is a one time fiscal crisis, then it can be covered by a one time asset sale even if the asset did break even including lost taxability. Thus selling the golf course, civic center, airport etc are still effective on a one time basis.
Plus this article shows how no city with a polluting airport can ever be green even if it did make money.
motherjones.com/environment/2010/04/flying-airplane-carbon-footprint
And Asheville airport is being filled with toxic coal as to boot.
Cecil,
You and Gordon love to fall back on that false, sensationalist argument of “it’s either this teeny tiny tax hike or no government at all”. Everytime someone attacks a tax hike, you two start talking about the horrors of not having paved roads, letting houses burn to the ground, and toxic waste filling out streams. I’m not sure whether your confusing of the issues is deliberate or explains your consistent antagonism of all things republican. I guess that’s the problem, we can’t have a serious argument when one side only plays stupid political games.
The only point I’m trying to make is that your “measley” $20 tax hike isn’t just $20. It’s attached to the water rate hike, and the yearly increases in property taxes, the utility rates hikes, etc. Property owners don’t get to pick and choose what they pay. These add up over the years and they don’t go away. I think the north Asheville residents are still paying the Jones School tax, and that was finished a long time ago.
We’re in agreement that this one charge won’t break the backs of the taxpayer alone, but it’s definitely another straw on the camel’s back.
Cecil thanks for the response.
“I’m not sure whether your confusing of the issues is deliberate or explains your consistent antagonism of all things republican. I guess that’s the problem, we can’t have a serious argument when one side only plays stupid political games.”
all things Republican? you still think Republicans want small government and lower taxes. I am sure that you realize that your statement is in fact playing one side only stupid political games.
http://sites.google.com/site/ncchapteroffire/crimereports
Just updated report on ILLEGAL criminality in NC
its ONLY 75 pages!
The NC ILLEGAL ALIEN CRIME PROJECT!
http://www.NCFIRE.org
Make SURE that Asheville does NOT become a SANCTUARY CITY for ILLEGALS!
J.,
In these tough economic times, many people are tightening their belts. Those most affected by the decline are low-income families and low-wage working people. All the caseload increases reported in the “State of the County”- those are people who were just making it before the crash and are now in need of public assistance.
These are not the folks who should be told to tighten their belts further as public services are cut. I’m sure the people earning upwards of $100,000 could afford to tighten their belts some, via taxes, please. We’ve got get more revenue from somewhere, and it makes to draw from the deepest well…I’m not saying tax only the wealthy, I’m not saying all tax revenue should go to public services…I’m simply saying the belt-tightening should be fair, and the tax increase progressive.
“J, families of five decided to be families of five. It isn’t the community’s responsibility to underwrite personal choices.”
Cecil … I’m surprised that you are doing the same math as Alan Ditmore. The both of you knocking the generation that must be present down the road to pay for your budget proposals is short sighted beyond belief.
With so many couples not having children, those that do will have to pick up the slack and you are out to punish them for creating the means to fund your agenda.
How can you justify that?
I was reading JWTJr’s response, and realized that Cecil makes a great argument against public funding of abortion; though he probably didn’t mean to. I mean, it’s not the community’s responsibility to underwrite personal choices…
As for Sophia, you can have a wide and deep debate as to who should pay what tax and how much. I was mainly taking issue with Cecil’s cavalier attitude towards the sidewalk tax. The “oh, it’s only $20” mantra is a very short term thought process, and leads to sustained higher taxes and passed on costs down the road.
It’s not just $20 a year though. It’s $20 a year on top of all the other increases people see in property taxes, health insurance premiums, utilities, sales tax increases, water hikes, etc. With the sidewalk tax being attached to property taxes, it will grow as property values grow too; so it will grow to more than just $20 a year in the future. Cecil is far from stupid, and I’m sure he was aware of that when he proposed it.
If you drive on Kimberly, you may notice it resembles a dirt road. One of the neighbors called City Hall and was told the city quit paving because it doesn’t have money to finish the job. This attitude of “oh, it’s just $500k for the bike lanes; oh, it’s just $2 mil for the new youth center” has led to the point where we apparently ran out of money to pave our streets. Taxes work the same way. The “just $20” will eventually be $20 too much for someone.
“Cecil … I’m surprised that you are doing the same math as Alan Ditmore. The both of you knocking the generation that must be present down the road to pay for your budget proposals is short sighted beyond belief.
With so many couples not having children, those that do will have to pick up the slack and you are out to punish them for creating the means to fund your agenda.
How can you justify that? ”
Is this really your argument? you do realize that the population of the U.S. is still growing, people are still having babies and immigration will continue to increase the population. I think it makes sense to pay for what you receive, surely one with center right leanings would support this.
Thanks JMAC, and Cecil. Too bad Asheville is so far behind the nation on overpopulation awareness.
http://motherjones.com/toc/2010/05
http://motherjones.com/environment/2010/04/flying-airplane-carbon-footprint
Hard to keep up with the multiple conversations:
J- I’m not making the argument that “it’s this teeny tax hike or no government,” or, I certainly don’t intend that to be my suggestion. What I intended to convey was that it’s up to the people of the community to decide what level of services they want. There is widespread support for construction of new sidewalks, particularly in parts of the community developed in the automobile era, post WWII, when sidewalks were considered irrelevant. We don’t have the money.
On the opposite side of the tax equation are voices of the Chicago School who have been advocating shrinking government until it can be drowned in the bathtub for about 30 years, and who drove federal policy from Reagan through Bush II. During those years, real income in the working class fell radically and the gap between the super rich and the rest of us widened until it has eclipsed any income gap in world history. Yet there are many noisy voices, most notably among Tea Partiers, calling for reduced taxes and smaller government. Those folks are the ones to whom I address my suggestion that they have every right (if they can muster the votes) to eliminate garbage collection and fire protection. Heck, they can even get the government out of their Medicare (as one wonderful Tea Party sign put it) if they have the votes.
Anyway, my intent was to illustrate the range of choices, not to pose $20 versus the deluge.
JMAC, your point per public funding of abortion is well taken. I’d note that while I feel we have no obligation to support personal choices, the truth is that funding abortion for low income people is far cheaper than funding medical care and etc. for low income families, so as a purely economic consideration, the former is a better deal for tax payers.
Sophia – agreed. We need to return to the tax structure of the very prosperous 1950s, when the wealthy carried a lot more of the tax load.
JWTJr – not sure what “agenda” you imagine I have. But one of my core economic principals is that we need to achieve a no-growth economy. Permanent growth is a fiction (check out an oak forest as a reference point). The only demonstrably sustainable path is going to involve a steady-state population, and if we intend that it subsist at modern technological standards, that means a population of 2-4 billion humans on this planet. We will have to figure out a better way to pay for our feeble years than to require more and more young workers paying into the system. It is going to be a rough transition, but the alternative is way worse.
“JMAC, your point per public funding of abortion is well taken”
maybe you confused me with Alan7, I did not intend to make any reference to the “A” word, that would surely set me up for a lynching.
Oy. sorry. (would be so much easier if people used their names instead of confusing initials)
“Oy. sorry. (would be so much easier if people used their names instead of confusing initials)”
No Problem
“What’s in a name? That which we call a rose
By any other name would smell as sweet.”
William Shakespeare