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Double doo-doo

The proposed budget released Thursday widens City Hall's already huge structural deficit -- and does so by design.

Mayor Brown's plan boosts spending by $16.7 million while cutting property tax revenues by $1 million, thanks to a small cut in the residential tax rate.

Something has to make up the difference, and that something is more state aid. It's up from $169 million in the current budget to $181.5 million, accounting for 42 percent of the city's operating revenues. (Basic aid is up from $142.3 million to $155 million, with the balance coming in the form of reimbursement for expenses the city incurs running programs on behalf of the state).

Basic aid is about double what it was a decade ago. Which is another way of saying that despite all the budget pain of the past decade, despite the imposition of a control board, the city is deeper in the hole than ever.

Brown and his people will argue otherwise. They talk about the city's recent budget "surplus" and the rainy day fund they've been able to build. But all that money has come from Albany.

Tony Masiello said back in 2001 that the city would be in "deep doo-doo," without state aid. Seven years later, we'd be in double doo-doo.

The point isn't just that the city can't pay its bills without Albany's help, but that the politicians in City Hall aren't even trying to do anything about it. The strategy, as city budget director Janet Penksa explained to me last week, is to intentionally not grow property tax revenues. As the city's tax base increases, the plan is to reduce tax rates so it comes out a wash. Brown went one step further with this proposed budget, cutting property tax rates to the point where total revenues drop.

So, the game plan is to grow increasingly dependent on the state. At a time when the state is facing fiscal problems of its own, and the prospect of cuts in aid to local government and school districts, which Tom Precious spells out in a story in today's paper. Brian Meyer has a story on the Common Council's reaction to the proposal, as well. 

No one is going to squawk about a property tax cut. But a lot more city home owners who I know complain about city services than they do city taxes, and the tax cuts work against improved city services.

Schools are the most pointed example. The mayor's proposed budget maintains school operating aid at $52.4 million. Perhaps not unreasonable, from one perspective, given the state's large increase in education aid to the district.

But the status quo represents a continuing retreat in City Hall's support of its public schools. A decade ago, the city provided schools with $64.1 million in operating aid, covering 12.3 percent of the district's expenses. City aid has since dropped, while district expenses have increased, and city assistance now accounts for only 6.6 percent of the School Board's budget. The state, meanwhile, picks up nearly three-quarters of the tab.

Between them, City Hall and the School Board are spending $1.2 billion dollars and the state is paying $755 million of that. That's three quarters of a billion dollars. And if Brown has his way, that number will only continue to climb.

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Local Government
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