Mayor Gaylor Baird and City Council members today announced a proposal that would increase street funding and help restore library hours, sidewalk repairs, and park improvements that were cut in the previous draft budget. The proposal involves using Highway Allocation bonding to increase funding for additional street improvements in all four quadrants of Lincoln.
"This additional street funding enables more repairs and construction across the entire community," said Mayor Gaylor Baird. "That infrastructure investment increases safety and improves quality of life for Lincoln residents. It also creates good-paying construction jobs to help advance our City's economic recovery."
"Interest rates are very low right now, in fact, they are significantly lower than the rate of construction inflation," said Council member Jane Raybould. "Using Highway Allocation bonds to build projects now actually saves money, because they would cost much more to build in the future."
"Beyond increasing street funding, the proposal creates even more benefit by freeing up general revenue money to restore library hours, sidewalk repairs, and park improvements that were originally cut in the budget," said Mayor Gaylor Baird.
"I'm very proud of the work we've done with the Mayor to restore these important community services that support families and kids," said Council member James Michael Bowers. "The budget process is intended to generate feedback from the community, and we have heard loud and clear residents urging us to find a way to fund library hours, sidewalk repairs, and park improvements."
Highway Allocation bonds are authorized by a majority vote of the City Council. Lincoln has taken this action twice before, in 2004 and in 2006. Bonding allows the City to borrow funds up front to get more projects done in a shorter amount of time. The bonds are paid off over time using a part of the Highway Allocation (state gas tax) funds the City continues to receive every year. That funding has steadily increased over the last ten years from $15 million in 2010 to over $27 million in 2019. Up to $25 million in new street funding would become available if the City Council authorizes the proposal.
Council member Bennie Shobe said that finding a solution that addressed the high number of community needs was a priority for him. "This is a very balanced and creative solution to a budget hit hard by the pandemic," said Shobe. "It adds funding for both streets and for community services like parks and libraries that protect and build our great quality of life here in Lincoln."
The City initially faced a $12 million budget shortfall, caused primarily by a significant drop in sales tax revenue due to the COVID-19 pandemic. Sales tax revenue provides 44 percent of the funding for the General Fund.
Council member Sändra Washington said innovation and flexibility were key to finding ways to close that gap. "Together with my Council colleagues and City staff, we have continued to dig deep into the details and funding mechanisms within our City budget," said Washington. "This is a solid solution that not only addresses the extraordinary challenges within the 2021 budget, but also turns those challenges into opportunities."
Mayor Gaylor Baird emphasized that the new funding for streets would be in addition to the quarter-cent sales tax funding for streets approved by voters last year. The quarter-cent sales tax continues to be completely dedicated to street improvements. The new Highway Allocation funds create additional street funding and, by law, must be spent on transportation. However, the general revenue used to restore library, sidewalk, and park cuts is flexible and can be used for any purpose.
Mayor Gaylor Baird thanked Council members for their hard work in shaping the proposal. "By listening, being open to creative ideas, and working hard together, we have a solution that increases street funding, saves money, jump starts economic recovery, and restores important community services," said Gaylor Baird. "This is the kind of consensus-building teamwork that we take pride in at the local level of government."
The proposal will now become part of the Mayor's draft budget. Council members will submit any other changes to the budget office by July 15 and vote on any additional changes to the draft budget on July 20. The City Council's public hearing on the budget is Monday, August 3, and the Council is scheduled to adopt the budget August 24.
The proposed budget amendment has no impact on the City's property tax levy which will remain at 31.980 cents per $100 of assessed valuation. That equates to $576 in City property tax for the owner of a $180,000 home. Out of every property tax dollar the City's share is about 16 cents. The total tax-funded budget is decreasing from $214.0 million in the current fiscal year to $210.4 million in 2020-2021. The number of City employees has gone up only three FTEs in the last 14 years – from 2,227 FTEs in 2006-2007 to 2,230 FTEs in 2020-2021 – despite Lincoln adding more than 45,000 residents during that time.
More information on the City budget is available at finance.lincoln.ne.gov.