Bill's Stack of Stuff

St Pete proposed 2008 budget cuts

At 8:30AM this morning Mayor Rick Baker unveiled his proposed 2008 budget reductions to City Council and residents in attendance at City Hall. This is in answer to the tax cuts announced late Monday evening by Florida state lawmakers in Tallahassee. Remember this is the first reading.City Council has asked for additional workshops on at least three items prior to making any decisions. This will be your opportunity to voice your opinion on this matter.

The formula for revising the budget is complicated. Here is a very brief summary:

• 2007 revenue was $223,657,000.
• 2008 revenue anticipated is $$236,725,393

New budget must meet the 2006 revenue levels which means

• $13,765,075 budget adjustments (expense and other revenue reductions)

Background:

• City has seen significant increases in property values over the past six years.
• During this time, the city has seen significant  increases in costs for insurance, medical benefits, 401k plans, fuel and public safety.
• Mayor asked not to cut police, fire, recreation centers, pools. This was the “hard edge” he was trying not to cross when deciding what to cut.

What Mayor / staff wanted to see as they worked on this budget:

• We want to maintain core services (police, fire).
• We want to continue to grow.
• All cuts will have an impact on residents - we hope to minimize that impact.

 Impact of proposed cuts:

• 70 positions eliminated (20 positions not currently filled).  This staff reduction is on top of 56 that have been eliminated or not filled over the past years.
• Reduced hours at some facilities (libraries, senior centers, pools, after-care)
• Eliminate funding for 68 co-sponsored events, 58 arts events, 67 social services and 11 non-departmental expenditures

Here is a brief summary of the cuts (this was 5 pgs in handout)

• Billing and Collections - $37,500 eliminates 1 position.
• Budget - $4,000,000 (eliminates reserve transfer).
• City Council - $20,000 - travel and training.
• Citywide - $3,280,468 - eliminates co-sponsored events, arts funding, social services programs, non-departmental funding.
• Codes Compliance - $727,000 - Reduce by 25% - eliminates 12 positions.
• Community Affairs - $468,080 - eliminates 7 employees. Merge city with county program.
• Computer Replacement - $356,800.
• Development Services - $439,838 - Eliminates 8 positions.
• Downtown Enterprises - #79,956 - Eliminates 1.8 positions. Discontinue in-house concessions Coliseum, Sunken Gardens. Combine Tea dances at Pier and Coliseum.
• Economic Development - $106,712 - Eliminates 1 position.
• Engineering/Capital Improvements - $293,001 - Eliminates 1 position. Reorganize and consolidate these two departments.
• Finance Department - $126,666 - Eliminates 1 position.
• Fire - $118,362 - Eliminates 2 positions.
• Human Resources - $100,195 - Eliminates 1 position.
• ICS - $137,666 - Eliminates 3.5 positions. Do not implement Portal software upgrade, reclassify 2 positions.
• Intergovernmental - $5,000. Find outside sponsor for Japanese student exchange program.
• Internal Services Administration - $250,000. Implement energy conservation programs.
• Library - $200,000.  Eliminates 5 full time and 3 part time positions.
• Marketing - $ 250,000 - Eliminates 3 full time and 2 part time positions. Restructure department.
• Mayor’s / First Deputy Mayor’s Office - $103,150 - Eliminates 2 positions.
• School Programs Office - $98,350. Eliminates 1 position.
• Midtown - $48,522. Eliminates 1 position.
• Neighborhood Services - $182,000. Eliminates 2 positions.
• Neighborhood Grants - $100,000. Reduces program ($200,000) by half.
• Parks - $251,970 - Eliminates 4 positions.
• Pier - $164,140. Close Concierge Center, promotional events.
• Police - $20,000 - Eliminates 6 positions. Reduce civilian support staff, merge police/fire warehouse.
• Port - $194,000 - Eliminates 1 full time and 5 part time positions.
• Real Estate - $60,000. Take HVAC offline over weekends and operate 5AM to 6PM weekdays.
• Recreation - $272,506 - Eliminates 3 full time and 8 part time positions. Reduce hours, eliminate TASCO event, Teacher’s Quest.
• Stormwater/Pavement/Traffic Operations - $100,000. Charge to capital improvement program
• Transportation - $81,776 - Eliminates 1.5 positions.

Total Reductions - $12,854,985 - Eliminates 70 full time and 18 part time positions.

Here are the proposed revenue increases:

• Development Services - $250,000 - Increase in plans and permit fees.
• Parks - $17,675 - Increase in Boyd Hill fees, rental rates at Lake Vista, Northwest and Campbell Park baseball fields.
• Police - $1250,000 - Institute renewal fee for alarms.
• Recreation - $517,415 - Increase in rental fees, special programs equipment, facility charges, swimming pool fees.
• Downtown Enterprises - $ unknown - Increase in airport hanger and marina slip rentals.
• Parking - $ unknown - Increase in various lot rentals and fees.

Below is a summary of the Legislation on Taxes recently passed by the Special Session of the Florida Legislature. Page 1 shows the Immediate Tax Relief that all Floridians will receive. This is what we all will receive with no further action. Page 2, however, shows the long term legislation that will require a 60% approval of the voters on January 29th. I am enclosing this as an informational tool so that you may be able to make the decision which is best for you.
Legislative Special Session - Property Tax

St. Petersburg City Council gives themselves a 40% pay increase

St. Petersburg City Council Resolution deciding the Impasse issues for the St. Petersburg Association of Firefighters

Scott J. Swift, Vice President of Bartlett Park Neighborhood Association
Mr. Swift's Letter to the Editor of Creative Loafing in response to the recent article about Bartlett Park

Clear Explanation of Tax Cuts

Sometimes politicians, journalists and others exclaim; "It's just a tax cut for the rich!" and it is just accepted to be fact, without questioning it. But what does that really mean? Just in case you are not completely clear and/or do not understand this issue, the following should help, if you are a reasonable person. Let's put tax cuts in terms everyone can understand.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this: The first four men (the poorest) would pay nothing. The fifth would pay $1... The sixth would pay $3... The seventh would pay $7. The eighth would pay $12. The ninth would pay $18. The tenth man (the richest) would pay $59. So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."Drinks for the ten of you now cost just $80. The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free.

But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his "fair share"? They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so: The fifth man, like the first four, now paid nothing (100% savings). The sixth now paid $2 instead of $3 (33%savings). The seventh now pay $5 instead of $7 (28%savings). The eighth now paid $9 instead of $12 (25% savings). The ninth now paid $14 instead of $18 (22% savings). The tenth now paid $49 instead of $59 (16% savings). Each of the six was better off than before. And the first four continued to drink for free.

But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man," but he got $10!" "Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!" "That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!" The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking somewhere else where the atmosphere is friendlier.

(Suggestion: Read Ayn Rand's Atlas Shrugged)

David R. Kamerschen, PhD Professor of Economics University of Georgia