The way City Manager Debra Campbell, speaking at City Council’s April 9 budget work session, described Asheville’s search for funding evoked the image of a late-night scramble among the couch cushions for drive-thru money. “We are looking under every rock, every pillow, everywhere we can find to see if we can do as much and as many of those things as possible,” she said. “We’ve been struggling.”
With the city’s major anticipated source of new money, the property and sales taxes resulting from the sale of Mission Health to for-profit HCA Healthcare, coming in at half of initial estimates for fiscal year 2019-20 — $2.5 million instead of $5 million, according to the Buncombe County tax office — Campbell explained that Council members would have to curb their initial spending plans for fiscal year 2020 and beyond. Moving forward, she and other officials stressed the importance of additional revenue streams to meet city needs.
City Chief Financial Officer Barbara Whitehorn proposed that Asheville institute a program of regularly issued general obligation bonds to support capital improvement projects. Staff has identified $330 million in currently unfunded capital needs through fiscal year 2024, she said, and many partially funded projects will require significantly more money than expected.
Whitehorn noted that the new Fire Station 13 on Broadway, which would also provide space for a police substation and an emergency operations center, is now projected to cost $11.4 million — $8 million over its current $3.4 million budget. “Additional investment in capital is really essential to providing our core services, and that routine bond program addresses the gap between investments and resources,” she said.
According to state law, bond referendums can only be placed on the ballot in association with a regular election. The General Assembly changed Asheville’s municipal elections from odd to even years when it imposed districts on the city in June, meaning that residents could not vote on any new bonds until 2020 at the earliest.
Regarding the city’s operating budget, Council member Julie Mayfield pointed out that Asheville wouldn’t have to wait for new money if the property tax rate were increased. “It feels to me like we’re not talking about an obvious solution,” she said. “I just don’t think we should keep kicking the can down the road and starving ourselves.”
But others on Council were less than enthusiastic about the prospect of a tax hike. Keith Young, referencing his remarks at the group’s March retreat, said he wouldn’t support an increase, while Mayor Esther Manheimer said higher property taxes seemed “like a sledgehammer” of a tool to cover immediate city spending goals.
Council member Vijay Kapoor countered that Mayfield should give more thought to cutting current city programs before proposing higher taxes. “I would have a very hard time supporting that without you spending a lot of time going through and asking, ‘Are we doing things right now that we shouldn’t be doing?’” he said.
With economists pegging the threat of a recession within the next year at its highest level since 2008, Kapoor added, now is not the time to increase Asheville’s spending. “When that rainy day hits, and it will, we’re going to be in a tougher spot,” he said.
Campbell agreed with those remarks: “With the economy progressing the way that it is, it could storm.”