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Thoughts on the recent meals tax increase

April 7, 2010

As many of you already know, Monday, Roanoke City Council voted in favor of a 2% meal tax increase for the next 2 years. The funds will be used to help public schools cover the shortfall created by the state levels cuts.

I sincerely appreciate the feedback I have received over the past few weeks on this issue and want you all to know how much I weighed your thoughts and opinions. As a city resident and restaurant owner, you can imagine this was a very challenging decision.  I share many of your frustrations and am concerned with the idea of additional support coming on the backs of one single industry — especially an industry so important to our quality of life, vibe and local labor force. While I ultimately supported the tax – I vigorously proposed more sustainable options during the debate and wish we could have taken more time to discuss the overall idea and long term impact of the program.

However, I have learned a great deal through the successes and challenges of my first term.  Most importantly, I have learned patience and better understand why we cannot always expect things to happen exactly as we might like.  There are many considerations and implications to each decision – and this must not be taken lightly.

Moving forward, I will continue to scrutinize the budget to find inefficiencies and other — more progressive — ways to support the schools after this two year period when the meals tax will automatically revert to current levels. If re-elected, I look forward to continuing as a member of the Joint Services Committee and playing a vital role – in cooperation with the schools — to find innovative and sustainable ways to support public education.

I am committed to ensuring Roanoke’s government is fiscally responsible - with a balanced approach to meeting current needs while still preparing for a positive future.  We must pay close attention to public safety, infrastructure, and most importantly our schools so our city can offer a high quality of life to all of our citizens.  As a father, educator, businessman and citizen – I have always been a vocal about the idea that our schools are our most important economic engine and are the most important measure of our success as a whole.

I am grateful to you for sharing your thoughts and am sorry for those of you who are disappointed in the outcome.  I hope you will all continue to support our local restaurants as we see the city through this very difficult time.

Thanks,  Dave

The Amphitheatre Stays on Track

August 14, 2009

Courtesy of Red LightWell perhaps I am not a great blogger- I should have had a post on this topic over a week ago and my posts are still too long! In retrospect what I write today is much different than probably what I would have written after the latest vote to keep the Amphitheatre A and E design funding in our capital budget. I was glad we returned the project to our capital budget but the process sure wasn’t pretty. I continue to learn a lot about this project and my role on council- especially over the last few weeks. I do believe that council made the correct decision last week to move forward to the next phase of design, usage and operational budgets for this project. We should know fairly soon about potential uses of an all-weather amphitheatre at Elmwood park and how that impacts the design and the operating budget. This will lead to about as accurate an estimate as we can get on what subsidy the city may expect to pay for this commercial amphitheatre with significant community usage. The question is not if there is a subsidy- but what subsidy is acceptable for this state of the art facility with- in my mind- huge economic potential for our downtown, our city and our region. I have heard much over the last week and as I said at the last council meeting this is not an easy decision. Ambivalence and uncertainty are a given with a “new” quality of life project that will change a downtown park, change the entrance into our downtown and change how we are use to doing things. I believe the change will be good, will be positive and offer many new opportunities for all ages from all walks of life. It will improve our quality of life here and will attract visitors and new residents alike. But by how much? At what costs? How different? All very good questions with no certain answers. This project has been the most prepared, studied, scrutinized project possibly in the history of the city- this is good and bad. It is good that people care and want to participate. It is bad because it is much easier from a leadership perspective to be overwhelmed with uncertainty and just shelf it or stop it when its time to make the big decisions. I believe we study too many projects and rarely do any actually happen. I believe we need to scrutinize and examine our entire capital budget process and I will help take a lead on this. However, I believe if we think a project is a good one as we have over many years and over many votes on this one we should not “can it” until we are sure it won’t work. We are getting to information that will help us with this question and I believe that is the right thing to do. There are many questions to come, much more public input and ultimately more votes on council after this phase concludes. We are not building the amphitheatre this year and in this economy but we will be prepared to move forward in better times if that appears to be the right thing to do at that time. Yes that may be a year or so away and may be with a different council- but those concerns should not paralyze this council as fear to make decisions has in the past. I am glad council took the time to study, debate and re-examine the second decision and I support the third decision in this recent debate to proceed to A and E renderings. I believe council as a whole can move forward as a team and continue to scrutinize the project and make the best and most informed decisions as the next phases of this project present themselves. While we disagreed recently, I do believe we would all like to see this project happen if it is feasible. That is what we will learn with this phase of the project. There are many concerns here- have we given enough in capital funds to the schools (I would say given two new HS and the largest capital projects in our history we have), what other capital projects are deserving, should we not spend any capital in this economy, what about Salem, and many more questions studied and not studied??? So please post comments and I will do my best to be a good blogger and respond. - Dave

The City Budget and School Funding

April 8, 2009

School BudgetI always relish the opportunity to work with and in support of the Roanoke City Public School System. Over the last month, I was able to participate in a work group with school board member Jason Bingham and our respective Financial officers to help figure out the budget gap for the schools and an amount that the city can and should transfer to the schools to help with this gap.

There were and continue to be many moving parts to evaluate in this process, including: interpretations of the state aid package and the federal stimulus package for schools. Changing revenue projections for the city also had to be added to the mix (fortunately these were better numbers). Since the schools cannot raise revenues directly on their own, there is an understandable desire to be fiscally conservative in their interpretation of these numbers and projections. Finally,  when you put financial experts in a room many interpretations of even the same numbers can result. It all led to a complicated process but a win-win scenario fortunately resulted. And keep in mind that the majority of the school funding gap is due to loss of state aid and revenue. Sooner or later the state is going to have to reconcile increasing school and transportation funding needs with decreasing revenue availability. But for this post- lets stick to what the city can do.

Last Saturday, City Council agreed to give just over $1.5 million to the schools and will consider another $500,000 if certain revenue projections and an estimate of the student census in our schools do not deliver more revenue to the schools. By certain calculations, along with cuts made as of last week by the schools, it at the very least made the amount the city gives the schools on level with last year and came close to closing the school budget gap completely. As we learned last night, the school’s projections and final interpretations still left a gap and they announced how they will close that gap. While hard on many who work in and use the school system, given where we were just a few months ago with a possible $15 million gap we have overcome a lot.

City Council like our School Board has shown a lot of commitment and thoughtful deliberation to try meet the challenge of balancing our budgets in this harsh environment. City Council has many additional obligations to fund along with the school system. Tough decisions have been made and currently we have a balanced budget. Another round of tough decisions is probably needed. Throughout this process, all on council have shown their commitment to the school system and I am sure this will continue if needs change.

There are some who think we should do more despite the balancing of the schools’ budget and our commitment to keeping them level year after year on the city side; and their are some that think we are cutting too much on the city side and that the pain is not equally shared. Some believe instead of cuts in the city budget, we should raise taxes. Others vehemently oppose this. Some believe we should take what we need out of our building raining day fund- a smart fund that helps with fiscal ratings of our city and to be used for major unforeseen emergencies. Is this one of those crisis moments? If so- how much and for what should be taken? This is where the balance and the reasoning that I think we have shown lies. I would not support using raining day funds or capital funds or raising taxes for a general operating budget at this moment in time- we have a balanced budget but I would absolutely consider any of this if the financial environment worsens much further and our revenue projections end up being way off.

What are your thoughts?

-Dave

The Budget Crisis: City and the Schools will work Together

February 19, 2009

While this is absolutely about a crisis and the decisions at hand will impact our community for a long long time- the one piece of good news I believe is how City Council and the School Board have committed to working together on minimizing the impact of this financial crisis on our great city. Perhaps the other piece of good news or even better news is how reasonable and understanding our citizens have been in this process. We are all rolling up our sleaves and participating in the process of making painful decisions in a reasonable and rational manner. We may want one negative option over another negative option- but we all seem willing to accept some negative options and make the best of them.

It hasn’t always been this way. Having served on the School Board and now Council, every year there are big budget decisions especially in the schools that impact the delivery of education to our children. Often these are vehemently opposed, often with good reason but with no options or middle ground offered. Perhaps it is how the economy is effecting us all, or the new political landscape nationally or pehaps the deligent work and presentations of the School Board. But a more reasoned approach seems to be happening with Council and the School Board and our Citizens.

While I have been one of the most vocal supporters of the School system for years- including trying to fund the gap in the PH construction budget and increasing the funding formula years ago- I do have some worry that not all the complicated facts of this budget crisis are being fully grasped and even worse that some politicizing of the facts and numbers may further complicate one’s grasp of the situation. A recent post by a respected blogger (www.starcityharbinger.com) is one example: is City Council going to give $7million or $3 million or what to help the schools? And if it is the lower number, have we shorted the schools yet another $4 million? Unfortunately these are wild numbers with no depth behind them, only a potential target. I worry throwing numbers around before we know how to get there again just complicates our grasp of the situation. The Harbinger also indicates a concern that this council does not fully understand the role of our schools the economic vitality and viability of our city: This City Council does indeed get it and it is priority one as it should be.

What is known is that due to decreased revenue projections, the City will short the school system about $1.6 million, the State about $6 million, sales tax decline about $2 million- though these numbers change daily and some recent news today that the State side may actually improve by a good margin. The Schools indicate heading into this budget they are short approximately $16 million. The City is short in our budget about $9 million. The $16 million on the school side includes the $11 million short from the City and State, and also unfunded mandates such as health care increases, debt service increases of $2.8 million (these uncontrollable cost escalation are normally dealt with every budget year whether there is a recession or not) and then there are provisions for possible further economic deterioration of $2 million.

So large numbers! The School Board is way ahead of City Council in terms of dealing with these numbers. City Council needs to reconcile our $9 million deficit with our budget and then go beyond that to give extra money to the school. Perhaps we need to find not just $9 million but another $7 million out of our budget. My fear is that saying $7 million is a target then we only give say $2 million - many will say that Council is shorting the School system $4 million. The vote this week in my mind was somewhat silly in that in reality it did not mean anything but did give a direction to administration of the need for significant cuts. Even Mayor Bowers was laughing when he raised his hand in support of finding $7 million, knowing it would be next to impossible but would certainly look good politically. For the record, I was the only one mentioning tax increases last week and have asked for a report of trends for tax increases. I am ok with prudent use of rainy day funds but understand that these are primarily for one time emergencies and not recurring costs as we are seeing in the School and City’s deficits. I wll do all I can to first make up for any revenue short fall the City has with the Schools- currently $1.6 million- the County did this and was roundly given credit for doing it. Next, I will work with council to go above this number as far as possible and still keep our city running, vital and progressive- albeit at a slower pace. If we get to $3 million, $7 million or more- great. But if we don’t lets understand that Council is doing everything it can to make the Schools better than whole from our side and under no circumstance at any of these numbers are we not supporting the Schools or symbolically reducing our support. All these numbers are reaches beyond what our revenue is shorting them and we have much work to get there- but the first thing we can do is make them whole.

There is also a blurring of funding available from bonds for capital projects and our operating budget. We can not use the capital money, eg move money that may be used for the market building renovation, for covering deficits in our operating budget. We could defer debt and not have as many capital projects but ultimately would make a small difference in what we are facing. In fact some capital project funding is essential to helping cities navigate their way through recessions and this, again, should not be confused with using this money in ways opposed to helping the school deficit.

Finally, I must say that many forget that the biggest short fall for the Schools is at the hands of the State. The State at some point is going to have to figure out how to get more revenue for the schools, the roads and many other vital services. Everyone is scared to raise taxes but at some point this needs to be considered at a State level- even a temporary gas tax increase would go a long, long way to solving this budget crisis in a more ongoing manner- something the one time Federal Stimulus Package won’t do but hopefully will help this year.

What are your thoughts?

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