Tacoma Q1 Financial Report: Could Be Worse

The numbers for first quarter 2012 are (more or less) in. After sitting through the First Quarter 2012 Financial Report at Tuesday’s City Council study session, the budget picture is getting a little clearer, but as we look into our budget-forecast crystal ball, there are still plenty of hazy areas.

What do we know?

With the information available at this point, it appears that Tacoma’s general fund has a slightly favorable variance in expenditures and revenues, as compared to what was forecast.

What we’ve got to look at are basically three sets of numbers: the original adopted 2011-12 budget numbers, the revised 2011-12 budget numbers from last fall, and the actual numbers recorded so far from what really happened at the end of 2011 and the first quarter of 2012.

Comparing reality with predictions made in the revised budget, we can begin to get a picture of how those forecasts are going to hold up for the rest of 2012, and what kinds of further adjustments need to be made to close the gap between how much money Tacoma has (and can expect to come in) and how much money the City needs to cover its costs.

Revenue numbers overall, though still down from the adopted 2011-12 budget, were slightly higher than last fall’s forecasts. General fund expenditures also did slightly better than last fall’s revised budget called for.

The presentation also looked at the money that will need to go to other funds (streets, traffic enforcement, the Convention Center, Tacoma Dome, permit services, Mountain Rail, and the Parking Fund) from the general fund. The current numbers look like we will be down slightly against the original budget for these funds, and down from last fall’s revised numbers. That’s good news there, meaning that the City doesn’t expect to need to increase the amount of money taken from the general fund to support these smaller funds.

So, that’s where things stand at the end of the first quarter. At the end of the second quarter we will be looking for phase two budget adjustments to be showing up, and giving us an even clearer idea of where the City’s finances are compared to where they need to be.

This week’s first quarter report suggests that last fall’s forecasts are holding pretty well. And that suggests that while a second phase of adjustments are still needed to address the rest of the budget gap, that gap will most likely be about what we expected it to be.

Looking forward to the City’s 2013-14 budget, we can expect to begin hearing more about that soon. The initial calendar from Tuesday’s report shows that we can expect to see a five-year financial forecast in June, followed by that second quarter financial update in July. A proposed budget should be ready for the Council in October. It sounds like you can expect a fair amount of opportunity to provide public input on the process. Heck, you could probably even get up and say a few words at Citizens’ Forum in a couple weeks…

Want the details? Download the handouts (pdf) or watch the presentations.