Mayor Chris Beutler today said the City Council's past failure to approve a one-percent increase in City spending authority has created a "growth barrier" that threatens the City's ability to meet the needs of an expanding community.
The State only allows city budgets to grow 2.5 percent each year. City governing bodies can vote to allow a budget to grow 3.5 percent per year. That extra one percent requires approval by 75 percent of the Council. For seven of the last nine years, the Council has not approved the one percent.
"If that additional one-percent is not consistently approved in a growing community, it will wreak havoc on the City budget, destroying the flexibility needed to hire new police officers and firefighters and maintain library hours and keeping swimming pools open," Beutler said. "Without that one-percent increase, we cannot keep pace with the annual inflationary and growth costs of providing needed services, and our City will not grow. Authorizing the additional one-percent will not lead to a tax rate increase. It merely allows the City the authority to spend money that is already budgeted and collected."
Beutler said the one-percent is routinely approved by hundreds of Nebraska cities, counties and other governmental entities. The Lancaster County Board has approved it every year since at least 2006 as have Omaha, Bellevue, Papillion, Fremont, Norfolk, Kearney and almost every other large city in Nebraska.
Council Member Cyndi Lamm today said the City made a reporting mistake in the 2012-2013 and 2013-2014 budget years. In both of those years, five of the six Council members -- 83 percent -- voted to approved the lid. The City Finance Department believed they had met the threshold based on their interpretation of the language on the forms submitted to the State Auditor's Office. The City later discovered there was a question about whether six votes were required, even if one member was absent.
Last week, the Mayor's Office contacted the State Auditor's office to determine if the absent member should have been counted as a no vote. They said their interpretation was that the absent member should have been counted, but they indicated that no further action was needed and no correction was needed. This information was shared with the Council members, including Lamm. Beutler said Lamm's partisan attack obscures the bigger issue of the growth barrier. He said Lamm must accept responsibility for the problem because she has consistently voted against the one-percent authority.
"Foregoing the one-percent authority over all these years has had a cumulative negative impact on our ability to meet the needs of an expanding community," Beutler said. "Our budget office is telling us that unless we take action within the next 12 months, we will be severely limited by this growth barrier in the next budget year."
Mayor Beutler has asked the Council to help craft a solution and to consider a resolution this fall to adopt the additional one-percent spending authority for the upcoming 2018-2020 biennial budget. The earlier vote is a practice recommended by the State Auditor's Office. Beutler said failure to approve the additional one-percent will lead to "serious cuts." With fewer employees today than when he took office ten years ago, Beutler said there are fewer places to cut.
"Over 50 percent of our budget is spent on public safety," he said. "If we choose not to cut public safety, the other half of the budget will have to sustain 100 percent of the cuts. Lower priority services like roads operations, libraries, parks, pools and neighborhood services will likely face deep reductions. The failure to pass the resolution will strangle our City's growth and set our community back for years."
Beutler said issue is not about raising or lowering taxes. "In fact, growth helps take pressure off property taxes," he said. "We just concluded the 2017-18 budget and successfully lowered the City property tax levy by 1.7 cents. That was possible because of growth in the tax base. It is a great example of what we risk when we don't take advantage of growth to build our community.
Restricting growth is not the right course for our community. I am confident that Lincoln residents appreciate where our City is headed and that together we can find a solution that keeps us growing and moving forward."