The four-year financial projection released last week by Springfield’s new chief financial officer was not a pretty picture. Using “conservative” estimates that include level funding for city departments, the report projects that the city faces a potential budget gap of $35.6 million (out of a total budget of about $530 million) in fiscal 2011. And without serious remedies, that gap could balloon to $95.9 million by the end of the four-year period.
Hardly a cheerful start for Lee Erdmann, the city’s recently hired chief administrative and financial officer, who took the job just last month. The report was required by state law as part of the larger, years-long effort to remedy the city’s fiscal problems, and it makes it clear that Springfield’s hard times are far from over. But in his introduction to the 12-page report—which is still in draft form—Erdmann describes the figures as “a diagnosis of a problem” and the starting point for a community-wide effort to find solutions to stave off the shortfalls.
“By releasing this draft early, it is my hope that the feedback received from the City’s elected leadership, department heads, union presidents, state senators and representatives, neighborhood organizations, the business community and the public can be used to enhance and strengthen the final plan,” the CAFO wrote.
The major causes of the city’s bleak financial future come as no surprise: costs like employee salaries and benefits, as well as pensions and healthcare for retirees, eat up a large and fast-growing part of the budget. Meanwhile, the city’s two biggest sources of revenue—state aid and property tax revenue—are simply not keeping pace with rising costs.
“In light of these realities, the City’s leadership and the public must acknowledge that City-provided services, as they are currently provided, cannot be supported by recurring revenue and should work to answer the following questions,” Erdmann wrote. “1. What are the core services that the City should provide? 2. What is the most cost effective way to deliver these services and still be sustained solely by recurring revenue?”
And that’s the hard part. In a city with struggling schools, ongoing crime problems and a general sense of a deteriorating quality of life, the idea of getting even less than they do already will not sit well with residents. Nor are they likely to be happy about some of the details revealed in the report about the way the city has been doing business—for instance, a recommendation that the city should consider giving public employees “larger flat pay increases in lieu of incidentals such as time off on Fridays to cash checks, shopping time at Christmas, ‘show up to work’ bonus, workers paid for a full day but allowed to punch out before the end of a shift, etc.”
That item prompted Mike Dobbs, managing editor of The Reminder, to ask at a press conference last week how he could go about getting a city job. It also prompted some outraged grumbling, both from residents unhappy that their tax dollars are going to pay city employees for conducting personal business on the clock, and from those city employees who have apparently not been allowed to ditch their desks to do some holiday shopping.
But while telling workers they have to cash their checks on their own time might feel satisfying, it won’t go very far toward fixing the major deficits the city could face. Erdmann’s report suggests large-scale changes, writing that “the city will need to look to make significant cuts from the operating budget requests, increasing local source revenue, and also strongly considering the use of reserves.”
Among the dozens of ideas suggested in the report are increasing the city’s hotel tax by 2.75 percent (which could bring in about $578,000 in the next fiscal year), strengthening the city’s tax-collection practices, making sure city departments are using grant money before charging costs to the general budget, encouraging employees to accept lower-level healthcare coverage (good luck with that one), tightening up employee overtime policies, cutting vacant positions and offering early retirement deals.
The report also floats the idea of a Proposition 2 1/2 override vote to raise the tax levy, and of seeking mid-contract concessions from city unions—both likely to be hard sells.
City Hall is asking for residents’ feedback on the plan. A feedback form, and the full draft report, can be found on the city’s website at www.springfieldcityhall.com
