5 Year Budget Outlook Grim - Tough Choices Ahead

The pessimists would say “huge budget gap looms.” The Pollyannas would say “it’s a great opportunity to reassess our funding priorities.” The reality? Definitely a little from column A, but since we’re in this situation, we might as well consider things from column B as well.

5 Year General Fund Forecast (2012 – 2016)
It’s not news to anyone who’s been paying the least bit of attention that Tacoma’s budget is in trouble. There was nothing startlingly new in the information provided by interim Finance Director Jeff Litchfield at yesterday’s City Council study session presentation. We’ve got a gap; changes need to be made.

According to estimates based on the latest available information, forecasts are looking a little on the bleak side, to say the least. Unless cuts are made, the gap this year and next will be significant, and will only get bigger from there.

• An anticipated budget shortfall of about $11.8 million by the end of 2012.
• An anticipated budget gap of $30 million by the end of 2013.
• Over the 2013 to 2014 biennium, a gap of between $60 and $65 million.
• Over the 2015 to 2016 biennium, a gap of between $80 and $85 million.

The bad news is that barring an unforeseen miraculous financial recovery, those numbers won’t be improving on their own. The good news, if you ask Pollyanna, is that those numbers assume no adjustments, but correcting that initial $30 million gap for 2013 shrinks the gaps going forward to less intimidating numbers.

Litchfield described the revenue projections presented as somewhere between realistic and conservative, erring on side of conservative. The attempt has been made to be as realisitc as possible, and not make any assumptions when it comes to economic conditions improving, while also not setting the City up to make cuts beyond what is necessary.

Proposed Rating of City Services for Policy Direction
The interesting thing going forward will be to see how the Council, City Manager, and staff choose to tackle the project of settling those accounts. And this year we have reason to expect an unusually transparent view of that process. It begins with the prioritization exercise City Manager Broadnax has given the Council as homework, with the goal of identifying the relative level of importance Council places on various programs and services provided by the City.

Also over at The News Tribune

This initial exercise in the 2013 – 2014 budget process comes in two steps. Step one is a kind of simplified budgeting process in which Council is asked to divide $8.50 out of an imaginary $10.00 total budget among eight categories of major City services and budget items. Step two has the Council assign rankings on a scale of one to four to a slightly more specific list of City services, with one being complete elimination of a service or program, and four being increased funding above 2012 levels.

Council responses to the exercise will be collected and tabulated, and discussed at a June 19 workshop. You won’t be left out either; a series of community input sessions have been scheduled. These sessions will allow the public to have their say on priorities as well, including a citizen services questionnaire and ranking similar to the Council’s, available June 25 through August 31.

As we’ve heard said before, there are a lot of moving parts in this puzzle, and there is no simple solution.

For a look at the documents the Council will be completing, take a look at yesterday’s study session handouts (pdf) If you’re an over-achiever, you could even do your own ranking and budgeting to see how you would answer the questions.