The Raleigh city manager released his proposed budget Tuesday for city council consideration. The $620 million budget closes a $7.5 million shortfall.
The budget proposal from city manager Russell Allen does not increase the property tax rate, but it does increase vehicle taxes by $5, eliminates 24 vacant positions and takes $3 million from capital reserve funds.
Councilors will get their crack at the budget starting with a public hearing on June 1. The council has to adopt a balanced budget by June 31, and they have weekly work sessions scheduled though the month.
Mayor Charles Meeker told the council that any changes or additions have to come with cuts somewhere else to keep the budget balanced. Any changes that do change the bottom line, Meeker said, “will be ruled out of order.”
During his presentation to council, Allen said the biggest problem for this year’s budget is sales tax. Allen said the city projects sales tax revenues to increase by 4 percent this year, but that’s still about $7 million less than three years ago.
The city hopes to raise just under $63.5 million from the sales tax over the next year.
Allen told councilors that the other question marks in the budget are what the North Carolina General Assembly’s budget will do to the city, and what impacts the new federal healthcare legislation could have.
Read the full budget below.
The budget proposal would cut 24 vacant positions, mainly in the Public Works and Solid Waste Services departments. But it also adds 11 new jobs in the Information Technology and Parks and Recreation departments and at the convention center.
Employees could see changes to their health insurance plan. The budget proposes increasing rates for dependents by 10 percent, doing a dependent care audit, and changing the plan for prescription drugs to a new company.
The council acted on that last item Tuesday and voted to use CVS Caremark for drugs instead of Blue Cross Blue Shield of North Carolina which had been providing the coverage along with the city’s group health insurance plan.
The budget would also do away with the 1.5 percent annual pay range adjustment and decrease merit pay raises to cap at 2 percent. Merit pay raises this year went as high as 4 percent.
The capital improvement program would be reduced by 39 percent next year under the budget proposal. There are no big projects in the $115 million proposal, mainly street maintenance and sidewalks. Read the full capital improvement proposal below.
The proposal defers replacing two fire trucks and 46 police cars for one year. The budget says delaying the vehicle replacements would mean higher maintenance costs but would save $427,000.
Allen said the delay was “not sustainable, but necessary.”
The budget proposal also restricts travel, training and event registration for city employees.
The budget would cut the arts per capital spending by 50 cents, down to $4. The arts program provides grants for public art in the city.
The budget also decreases grant funding for human services by 10 percent and proposes reducing or elimination any other grant programs.