May 2010 Highlights

As May ends, the City Council is ready to begin "budget month" for 2010—and the numbers look challenging.  But first, we'll remember our veterans.

Memorial Day: The Memorial Day service in Winston-Salem this year will be Monday morning at 9 a.m. at Lawrence Joel Veterans Memorial Coliseum. Join us in honoring our service members, veterans, and their families, for their sacrifices which have helped keep our nation safe and free.

Balancing act: At the end of last week, our city manager released his proposed city budget for fiscal year 2010-2011. As I emphasized in last month's update, the 2010-2011 city budget is one of the toughest we've dealt with in decades.  Due to the slow pace of recovery from the deep nationwide 2008-2009 recession, both sales and property tax revenues are projected to actually decline this fiscal year. That should reverse itself beginning in the following fiscal year, but for now, we've got to deal with an extremely challenging fiscal situation.

That's reflected in the budget recommendations from our city manager.  Total general fund operating expenditures are cut by 1.1% compared to last year's budget, a cut of almost $2 million.  That includes elimination of 31 full-time staff positions, no staff pay increases for the second year in a row, and over $1 million in other operating cost cuts.  Even with those cutbacks, the manager's recommended budget includes a property tax rate increase of 3/4 cent per $100 of taxable property, to generate about $1.56 million in additional revenue. Therefore, eliminating that rate increase would require finding an immediate one-year net savings of $1.56 million.

Over the coming month, the City Council will hear our financial officers' detailed reports, consider the budget recommendations from the city manager, take public comments, weigh alternative suggestions, and adopt a budget, tax, and fee levels for the coming fiscal year.  Here's the projected schedule:

  • June 1, 4 p.m., Finance Committee workshop
  • June 3, 4 p.m., Finance Committee workshop
  • June 8, 7 p.m., Finance Committee public hearing
  • June 10, 4 p.m., Finance Committee workshop
  • June 14, 5 p.m., Finance Committee discussion and vote
  • June 21, 7 p.m., City Council budget hearing and vote

All the meetings are open to the public, and the June 8 and 21 meetings include formal public comment opportunities.

During this process, I will be looking for ways to reduce or eliminate the proposed property tax rate increase without harming needed city services for our citizens.  As I study the city manager's recommendations, I have already identified a couple of possible changes which could go a long way toward making up the difference. However, I'm still looking for others and want to invite your participation now.

The full recommended budget is available for review now at Go take a look, study the details, and send me via email any suggestions you have. I am particularly interested in additional ways to reduce operating expenditures without harming city services.  The more specific the suggestion, the more potentially useful it may be.  When making suggestions, please keep in mind these limitations:

  • Many expenses can't legally be eliminated.  We have to make contributions at a set rate to pension funds, for example, and we can't default on bond payments for construction already done (e.g., roads, parking decks).
  • Many of the most effective efficiency ideas cost money to get started, and can take years to phase in.  For example, a perennial favorite cost-cutting suggestion—eliminating general backyard trash pickup—is already included in the city manager's recommended budget this year, but in its first year it generates only $176,000 in savings.
  • Across-the-board percentage cuts would affect city services, such as police, fire, streets, sanitation, parks, and vegetation management.  Remember, there's no such thing as a free lunch!
  • When you spot a savings possibility, remember to check where the funding comes from. Many programs are paid for by special revenues or grant funding sources, and cutting them won't save money on our local taxes.
  • Capital projects funding usually comes from sources other than general revenue taxes.  Cutting back future construction plans may reduce funding needs down the road, and may be worth considering, but it doesn't cut the current operating budget.
  • Be wary of short-term savings that will hit us later in increased maintenance, higher costs from unintended consequences, or other delayed costs.

But with all those cautions in mind, I really am interested in your suggestions.  Please send them to me, and they will get a response.  I will keep track of ideas suggested, and during June will send out a list of those received, along with my thoughts in response.

Electronic sweepstakes license fee: During May, the city council gave final approval to one new revenue source which should help to address our budget crunch this year.  We approved a new business privilege license tax for "electronic sweepstakes" operations.  These are often billed as "internet cafes", but in reality constitute a way in which operators are getting around state law restrictions on video poker games.  There are dozens of these operations currently doing business in Winston-Salem.  In my opinion, they are effectively just low-rent gambling operations which prey on the poor and desperate.  Legislation is being debated in Raleigh this year which could ban these operations.  In the meantime, however, many cities and towns in our state have enacted business privilege license taxes on them.  I supported Winston-Salem's tax on these facilities—and I hope that it will be in effect for just this year, with the General Assembly enacting legislation this summer to close the loophole in video gaming restrictions which permits these so-called "internet cafes" to slip through.

Second primary: Don't forget that there will be a "second primary" held in North Carolina this month (June) to decide a number of contests in which no candidate received enough votes to win his/her party's nomination for the fall ballot.  Most significantly, there is a runoff for the Democratic nomination for U.S. Senate.  Early voting begins June 3 at the Forsyth County Board of Elections office downtown in the Forsyth County Government Center on Chestnut Street.  Election day in which all regular precinct polling places are open for voting will take place June 22.

Sit-in anniversary: On May 25, our community celebrated the 50th anniversary of the downtown lunch counter sit-ins here in Winston-Salem.  Those protests, led by black and white college students from the institutions now known as Winston-Salem State University and Wake Forest University, helped break the back of the system of racial segregation in public accommodations in our state and region.  On this anniversary, we recognized the contributions of those courageous leaders, a number of whom are still active in our community today.

Sanitation collections changes: A quick reminder:  Due to the Memorial Day holiday on Monday, there are some changes to city sanitation collections scheduling this week (May 31—June 5).  The residential garbage collection schedule is UNCHANGED. However, both curbside recycling and yard-waste cart collections will be DELAYED ONE DAY from their usual schedule this week.