Looking at the city’s most recent financial report, one could think the “crisis budget” from last year is over… you remember that one? … the one that led to layoffs of city staffers and funding cuts in all departments to avoid a $63 million deficit. Those troubled times are coming again.
But first, the good news. Tacoma’s general fund is set to be $12 million higher than projected thanks to about $4.5 million in additional revenue and $7.5 million in savings from lower jail costs, lower medical expenses and unfilled city staff vacancies. The city is projected to have about $23 million in reserves, which is about 5 percent of the general fund. The goal is to get that reserve to about 12 percent. All that is good news, however, all is not well in City Hall.
That surplus projection doesn’t mean the city has money to spend on additional firefighters, police officers or city staffers. Tacoma still has significant budget troubles to face. The city is projected to have a general fund shortfall of about $26.3 million in 2015 through 2016 and another $38 million during the following biennial budget for 2017 and 2018. Funding that gap with the traditional budgetary method in Tacoma of deferring repair would make the matter worse in the long term. The deficit could jump to $72.8 million by the 2017 budget talks. Then there is that $800 million in street and infrastructure repairs that took decades to create and now needs addressing with no bonding capacity left and few taxing options left to fund them.
“We really have a very big problem to solve,” Mayor Marilyn Strickland said at a budget study session. “We still have a lot of work to do before we start thinking about hiring staff.”
While the city might have spent less than what it took in during 2014, there is a backlog of projects and repairs that have yet to be addressed. Part of tackling the long-standing “structural deficit” in the city budget rests with the Financial Sustainability Task Force of volunteer accountants and specialists tasked with developing recommendations.
That task force’s roster of 28 suggestions largely focuses on cutting city salary and benefits to keep pace with the rate of revenue growth. Salaries and employee benefits are growing at a rate of about 6 percent a year, while revenues from taxes and fees are growing at just 2 percent, a third of the growth of payroll.
“In a nutshell, the cost of current services is growing much faster than city revenues,” said Lyle Quasim, task force chair and co-chair of the Tacoma-Pierce County Black Collective. “The city needs to make it a priority to bring the growth of expenditures and revenues into better alignment, so that we can stabilize service levels for residents and businesses. There simply aren’t a lot of options available in terms of new revenues. We need to work harder on collecting revenues from the current tax structure, and look at closing exemptions and credits.”