Saturday, March 31, 2012

My position on the next city budget

The City of Dover has been able to cut a 3.4 million dollar structural general fund deficit in half by changing the curve on spending. Now the tough work begins. 1 million dollars of the remaining structural deficit is due to changing regulations and tipping fees through Delaware Solid Waste Authority and rising gas prices for the sanitation department. All of the budget news is not bad though. Thanks to new natural gas recovery techniques, the price of natural gas has fallen which enables us to decrease electric rates. This makes my stand on the budget pretty simple.


I am opposed to any tax hike. The 700k deficit should be closed by an across the board general fund 2% cut except for the police where I favor a 20% fine increase and Capital school district paying more for its school resource officers. No police cuts should occur. I should highlight the fact that we are planning a 12% cut in electric rates because costs have gone down. The average person will only see 60% of that cut because you will likely pay $6 a month more in trash fees because there our costs have gone up because of gas, yard waste fees, and tipping fees to the point where we are losing a million dollars next year. Let's be honest gas doubled in the last three years, dump fees have as well. It is a more honest accounting not an increase because in reality your bill will drop. We will just take less from you in electric rates which will for most of you be double the increase in trash fees. That is a trade I will make every month because it is more money in my pocket and yours.


The general fund has a structural problem unlike the other 10 funds the city has, the spending was based on high transfer taxes and building permit fees during the boom times, but the new normal is here. Washington's debt building policies and Delaware's crazy energy and Del DOT policies are hurting economic growth. We have to deal with the issue instead of keeping electric rates higher and bringing more than the amount I advocated as the cap which is 8% of revenues (the maximum that we can be assured for our high bond rating). We keep putting things off to next year, next year is here. We have to condense departments and restructure. We have to have employees and retirees contribute modest amounts to their health care costs like everyone else. We will also cut some positions permanently, including some high level ones while filling positions that improve or keep the level of service the citizens expect.

The real answer is to have strong economic development to bring in stable growth. Projects like the Calpine plant would bring in 2.3 million a year into the city. That one project would eliminate the deficit. I am pushing for other business friendly policies because prosperity solves the problem when combined with fiscal restraint. Tax increases are not the answer.

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