This month, Stow City Council is reviewing the annual budget proposal submitted by Mayor Sara Drew and Finance Director John Baranek. It's truly the most important thing council does all year.
- In 2011, Stow used $980,000 from the roads budget to pay for operational costs. In 2012, the city plans to use $800,000 for that purpose. Roads only get more and more expensive to fix as time passes without traditional maintenance. This budget is better than Karen Fritschel’s budgets with respect to infrastructure, but it’s still unacceptable.
- We will lose $667,000 in property taxes in 2012 because of property value reassessments. We are also losing $427,000 in state funding. Next year, we will have a similar decline (even when compared to 2012 revenue) because the state is phasing out the estate tax and Stow will lose another large chunk of Local Government Fund revenue. However, we did have some offsets to our 2011 losses. Healthcare costs came in much lower than expected, and income tax increased by 10 percent. In 2012, we are projecting a return to the prior healthcare costs and a 1 percent income tax increase from 2011 numbers.
- In case you’re interested, Stow’s unemployment rate is 6.2 percent. The county’s is 7.3 percent. Ohio’s is 8.6 percent. Stow’s recent high in unemployment was 9.9 percent in January 2010.
- This budget fills four employee vacancies (2 police officers, 1 service worker, 1 engineer). I agree with each of these hires — the police officers, in particular.
- Here is the most important part of the budget — does it spend more than it takes in? The answer is: “Yes. A lot more.” We currently have a carryover balance of $4.174 million. At the end of this year, we will have a balance of $3.481 million. That’s a projected budget deficit of $693,000. At that pace, we will have blown through our savings account in five years. This is a big, big problem, especially considering the additional cuts to state revenue on the horizon and the fact our roads repairs have been underfunded by about $3 million since 2009.
- In 2011, Fox Den lost $85,000 operationally. When you add in the $371,000 mortgage payment, the city spent $456,000 to own a golf course in 2011. Meanwhile, our roads are crumbling and police force was undermanned. When will the time come when we finally cut our losses or admit we need a professional management team to take over? Revenue has fallen 25% since the government took over. Some Fox Den apologists ask why I’m so adamant on this issue. This is why. A large chunk of our budget goes to subsidize the golf course every year.
- I have asked the Finance Department to put together a five-year “Doomsday Plan” that provides options for fundamental budgetary alterations that we can implement if tax revenue does not return to its prior levels within the next five years. Having a contingency plan is the responsible thing to do.
- The budget received its second reading on the floor of council on Thursday. It is projected to receive a vote on March 22. Finance Committee will meet on March 19 for discussion on the topic.