THE CITY MANAGER'S proposed 2018 City Budget has been the talk of the town since it was unveiled to the public last week.
It attempts to address the City’s nearly $13 million shortfall not only in terms of a budget solution, but also tries to offer an explanation as to how things got so bad.
While city leaders are quick to say it’s only a preliminary budget — upon which future negotiations and decisions will be based — it does indeed establish a baseline for said negotiations.
And therein lies the issue.
To City Manager Rob Hernandez’s credit, the budget pulls no punches in telling the public how dire the situation is, and how dire the possible options are.
How dire are the options? Here are some lowlights:
Cutting ALL arts and cultural funding. You know those wonderful free events that help set Savannah apart, events that help establish our core identity as a town that celebrates its culture and makes it accessible? Many, such as the Savannah Jazz Festival, would cease to exist without City funding. The day the music died!
Cutting nearly all social service funding. In a city with at least a 26 percent poverty rate and skyrocketing juvenile crime, social service programs can provide a better return on taxpayer investment than jails and courts. Some would virtually vanish without City funding.
Cutting 36 firefighting positions while at the same time calling for a sweeping and significant new Fire Service Fee. Sorry, can’t explain this one. Doesn’t make sense to me either.
Everyone tells me, don’t worry Jim, there’s no way they’ll actually cut all this. Remember the butt-kicking Hernandez got from the public when he tried to cut just 30 percent of the arts budget last year?
That’s true, but the important part is the basis of the negotiation. And Hernandez’s budget makes two things clear: 1) Services must be cut, and/or 2) There must be tax increases, either from a property tax millage increase or an increase in assessments.
Hernandez identifies the Stephens-Day homestead exemption as a major “external factor,” causing a problem in funding City services, though it’s anything but a problem for those of us who rely on it.
Passed in 2001, Stephens-Day for the most part freezes property taxes at the purchase price, thus rewarding those of us who bought homes when evaluations were lower and invested in Savannah before it became such a hot property (literally).
But it’s not just that. Hernandez also says that property tax assessments are simply too low, a responsibility which lies with the County Board of Assessors.
“To illustrate, the cities of Sandy Springs, Roswell and Alpharetta are considerably smaller than Savannah in geographic area, but comparable in population, yet have similar or higher total assessed values,” Hernandez writes.
“Even with two shopping malls, a vibrant tourism sector, convention center, institutions of higher learning, an international airport, bustling port, military facilities, and a robust manufacturing and logistics presence, Savannah’s valuation is well behind Sandy Springs ($7.7 billion), but just slightly above Alpharetta ($5.3 billion), and Roswell ($4.8 billion), all communities lacking these key economic assets,” he writes.
(I will leave it up to you if you consider Savannah Mall to be a “key economic asset,” as the budget states, or if you consider comparing Savannah to any metro Atlanta municipality a fair comparison.)
So to recap, two macro revenue-generators Hernandez proposes — increasing assessments and removing Stephens-Day — would have to be done at the County level and aren’t even things his office or City Council can accomplish.
Which leaves the City the option of cutting services. So... maybe they will cut those items they are threatening to cut?
However, what is in City Council’s control is big-ticket spending, to wit:
“Coupled with limits on the City’s ability to raise revenue, the General Fund has redirected funds to debt service in order to finance much-needed infrastructure improvements, or safeguard valuable property, such as the Fairgrounds, for future redevelopment. In FY 18, debt service payments will approach $5.7 Million,” Hernandez writes.
“We anticipate additional debt issuance within the next 36 months for completion of the Downtown Streetscapes project, new parking facilities, completion of the Savannah Arena, and development of a consolidated municipal administrative and public safety center,” he writes.
Another way of saying this is that the City has more financial commitments than it can afford — exactly the criticism I and other writers have pointed out for years.
The new Arena he mentions is a case in point. By itself, the Westside Arena doesn’t factor into the current budget debacle, as it’s funded by a sales tax (SPLOST).
However — as I tried to point out a year ago, mostly to crickets — the renovation of the adjacent outbuildings to the new Arena and all associated infrastructure is not funded by SPLOST, and would have to come out of the City’s depleted coffers.
As for the nearly $3 million Fairgrounds purchase, that would itself pay for over double the current City arts budget and social services budget, both of which Hernandez has put on the chopping block.
The City still has no plan for the parcel.
Proposed parking garages to aid private developments — on the east and west ends of River Street respectively — will be underwritten by taxpayer debt. Meanwhile, a major private development which relies on almost no taxpayer funding, the Morris Complex at Trustees Garden, gets hassled just for requesting a basic beer/wine license.
The right hand doesn’t know what the left is doing. In my neighborhood, a company has been working off and on for about a year to resurface a couple of blocks of 49th Street, to restore its “historic patina.”
The work never seems to end, no one is pleased with the results, and no one seems to know exactly why this patina on this particular road has become so important.
But a City contract renewal for that same company, at over $1 million, was quickly approved without discussion at last week’s Council meeting.
That contract is significantly more than the amount of either the current City arts budget or the social services budget, and as far as I can tell is literally good for nothing.
Meanwhile, the City’s stated top priority for lobbying the state legislature in 2018 is.... renaming the Talmadge Bridge.
That is literally at the top of their wishlist, above enlisting the state’s help in addressing juvenile homicide! The mind boggles.
In any event, while the budget is in fact in a state of flux, unfortunately the starting point for negotiations doesn’t look good any way you look at it.