The city of Fulton could spend about $20,000 less in 2012 than it will likely spend this year and still wind up with a massive increase in taxes.
This uncomfortable problem was visible to members of the Fulton Common Council and some Councilors-elect Saturday morning at a budget workshop, which marked the first time that Mayor Ron Woodward’s administration showed the numbers behind his comments about needing to cut several hundred thousand dollars from the budget.
They reviewed numbers that showed what would happen if no further cuts were made to next year’s budget. Lawmakers seemed to agree that more cuts will have to be made.
So how can it be that a budget that spends less would have to tax more? Here’s how:
- The budget draft would spend $15.5 million in 2012, down about $20,000 from the adjusted spending of 2011 but up $200,000 from the original 2011 budget;
- Projected revenues would fall by about $50,000;
- And the city would use $290,000 of its fund balance to lower taxes, which is $100,000 less than it used in 2011;
- That leaves a deficit of about $355,000.
That deficit requires an increase in property tax revenues of 6.27% to cover.
But some of the city’s largest taxpayers will pay much less in 2012 because they have won lower assessments on their properties. The $8.8 million drop in their assessed values adds another $144,000 to the deficit.
So the bottom line is that it would take a 9% increase in the tax rate to cover the $499,000 deficit.
“We have been as stingy as we could be the last few years,” said Woodward. The city’s last four tax levy increases were 3.39%, 0%, 0%, 0%.
A new contract with its firefighters union will provide some relief. Ratified Saturday, the contract increases union members’ contributions to their health insurance to 15% from 10%. Woodward hopes the deal will be the template for deals with two other unions, including the police officers’ union.
Overall spending on salaries will be down in 2012 from 2011. Three positions will be eliminated because of retirements.
To make deeper cuts, lawmakers will have to cut more people from the city payroll, Woodward said.
Two other areas where funds could be saved would be to eliminate the city’s contribution to the Fulton-based Menter Ambulance Service and to the Fulton Public Library.
One Councilor said cutting the library’s funding would probably force it to close.
A budget is due before the end of the year. Lawmakers will likely act to override the 2% cap on tax levy increases before they act on the final budget.