On June 24 with a 6-5 vote, the Billings City Council approved a Fiscal Year 2020 budget that includes a property tax cut. I voted against this tax cut and the moderate cuts to public safety.
This tax cut is being paid out of the city’s reserve fund. The reserve is kept so the city has money for unforeseen problems. The council policy to maintain a minimum fund reserve of $12 million is important. The reserve has been spent down from $29 million in FY 2018 down to a projected $3.7 million in FY2022. This is now being spent for operations expenses for the General Fund, mainly public safety. Operations costs like personnel and maintenance should be funded by revenue not our reserves. The reserve is best spent on capital investments, like Centennial Park or a new police and fire station, not for operation costs. A council majority voted against proposed revenue increases that would have limited spending of our reserve.
The structural imbalance in the General Fund will never be corrected by spending reserves. Spending the reserve on a tax cut while reducing the training and overtime from public safety is not a consistent decision. This was the decision of the council in the 6-5 vote.
Last summer the FY 2019 budget presentation by former City Administrator Bruce McCandless was very clear: Spending reserves on operations is not only unsustainable, but an impudent financial decision. City Administrator Chris Kukulski advised similar policy consequences in this year’s discussion.
Without a future public safety mill levy increase, the reserve will dramatically shrink by FY 2022 to a small $3.7 million in reserve. The majority vote left our police, 911 dispatch and firefighters taking the brunt of these General Fund cuts without any revenue relief. Without a public safety levy increase, the consequences of the vote will lead to the city’s inability to cover General Fund payroll costs by FY 2023 or drastic cuts in the General Fund costs. This will be far below the minimum and our city in a very difficult fiscal position with reduced public safety services.
Some members of council seemed satisfied by the passage of this budget. I wonder if the public will be satisfied if our city finds itself without a minimum reserve? Without adequate General Fund revenues fire, 911 and police service will be subjected to further cuts.
I am writing out of concern that Billings residents are informed and understand the council decisions. I encourage residents to speak up and communicate with the council about their concerns and preferences for our community. Democracy works best with an informed community.