No Surprises Seen in 2011 Charleston City Budget

December 2, 2010

Investigative Reports

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The NerveBy Marc Knapp
Citizen Reporter

Charleston City Council members will vote on the 2011 budget at the council meeting next week.

A draft budget was given to council members on Nov. 23, with few surprises for council members as they’d been briefed on the broad terms at the last meeting. The vote will take place at the Dec. 7 city council meeting.

As Mayor Joe Riley and others have said, preparing the 2011 budget was tough. The main sources of revenue for the city were expected to be flat or down. The city projected flat property taxes and declines of 9.5 percent and 20.8 percent, respectively, in revenues from business license and permit fees.

In addition, there are pressing or unavoidable increases in costs relating to police and fire departments, and equipment purchases. The city also decided to eliminate staff furloughs introduced in 2010, a move estimated to boost costs by $1.3 million.

To balance the budget, Riley and Chief Financial Officer Stephen Bedard noted at the Nov. 23 Budget Workshop that all spending has been scrutinized. The cost savings achieved were spread throughout all city departments.

In consequence, the 2011 draft budget incurred spending of $145.96 million, down 0.44 percent from the pervious year. Importantly for city residents, no increase in property taxes was proposed.

Is the 2011 budget reasonable? It would appear so. The assumptions of revenue are certainly not optimistic and there seems little likelihood of a surge in costs. But there is still fear given the state of the economy and sluggishness of the private sector.

Much of the Nov. 23 meeting was taken up with spending issues, even if it wasn’t planned that way. It was the drift of questions on the budget and speakers in the citizens’ participation segment.

It started with Councilman Jimmy Gallant asking for a breakdown of salaries and costs for individuals who had left the employ of Charleston’s fire and police departments, and for the replacements.

He said he needed this information to better assess the 2011 budget figures.

Councilman William Dudley Gregorie followed this with a request for a breakdown of revenues and spending on the basis of council districts. He wanted this to better answer questions from constituents who feared their district was not getting its fair share of city spending.

Councilman Timothy Mallard supported the request and added that the Peninsula was getting the lion’s share of spending and districts like West Ashley were missing out.

Somehow the mayor retained a straight face through it all held back a you-have-to-be-joking exclamation. He did say that to obtain the information Gregorie requested would be difficult.

It was primarily a question of allocation – of both revenues and expenditures. There would need to be cooperation with the county, which collects all property taxes but does not split them on the basis of voting districts.

And then there’s the question of do you allocate revenues, business license fees or property taxes – for a particular business which may be active in the whole of the city but has only one place of business? The same sort of thing applied to allocation of expenses. Police and fire fighters serve the whole city and not just voting districts.

Riley had a point. An assessment made in terms of the allocation of revenues and costs would require many assumptions, perhaps enough to make any conclusion suspect.

To go further, if the purpose of the data gathering is to find out whether some districts are being shortchanged (defined as “spending per capita is less that revenue per capita”) the undertaking should not be undertaken.

In terms of revenue collection, the greatest concentration of valuable properties and business is downtown and Daniel Island (District 1).

On a per capita basis, it seems likely that downtown/Daniel Island residents and businesses contribute more revenue that any other district. And on that basis, higher city spending in these areas relative to others would be understandable and “fair.”

But maybe Gregorie defines “fair” as having uniform capita spending in all districts, regardless of the revenue derived from each district. In this case, there would be no point in making an effort to split revenue among districts.

The requests by Gregorie and Mallard appear dubious, at best. Certainly analyzing capital or construction spending by districts is worthwhile and justified.

But splitting the costs for police, fire and sanitation on a district basis is daunting, and considering the likely many assumptions, not very meaningful.