With slight growth and state constraints on new property taxes, Mayor Paul Soglin on Tuesday proposed a $275.2 million operating budget that maintains city services, cuts the subsidy to Overture Center by $300,000 to $1.45 million and raises taxes on the average home by $31.76 next year.
Soglin's proposed budget has no huge initiatives but strategically invests in priorities of fighting poverty and creating opportunity, neighborhoods and helping youth better use out-of-school time.
The budget slightly reduces previously negotiated pay raises for all labor unions and nonrepresented employees but still delivers $3.9 million for wage increases. It also has no furloughs and aims to avoid layoffs. The proposal pares $1.6 million that would have been devoted to wage increases under existing contracts.
The city, however, is amid negotiations with police, firefighter and Metro Transit unions, which retain collective bargaining rights under state law, and if an agreement can't be reached on a reduction like other unions, those agencies would have to cut about $300,000 apiece from their budgets, Soglin said.
The mayor is adding money to improve the funding process and support efforts for community services, including support for three neighborhood centers, emerging opportunities and YWCA Transit for Jobs programs, and an apprenticeship effort for low-income people entering the trades.
The proposal also funds a new assistant fire chief position, more police security at transfer stations, citywide domestic abuse intervention services, planning efforts and more.
"Am I pleased with this budget? Yes. Am I pleased with this budget? No," Soglin said, voicing frustration with state and other constraints that inhibit the city from fully addressing challenges and opportunities. "My goal is no layoffs, no service cuts and no reduction in what we do for the people that we serve."
The budget allows the City Council to add about $350,000 in spending before hitting the state cap on tax collections, the mayor said.
Council President Chris Schmidt called the proposal "a good start" and predicted serious discussions on whether to restore more employee pay and funds for Overture.
In 2013, Soglin tried to cut Overture support from $1.85 million to $850,000, but the City Council ultimately added $900,000 for a total of $1.75 million.
Overture's $13.4 million budget for fiscal 2013-14 assumes another $1.75 million from the city.
"We find the budget proposal very encouraging," Overture spokesman Robert Chappell said. "We're hopeful. We'll work with the City Council to see if they can find discretionary funds to help close that ($300,000) gap."
The mayor said he's aware of interest in adding at least $150,000 for Overture and wouldn't object if it's not borrowed money or one-time revenue.
The proposal budget will be considered by the city's finance committee next week with recommendations on Oct. 21. The council will consider the operating budget and proposed $223.6 million capital budget the week of Nov. 5.
It's unclear if the council will seek significant changes like last year, when it approved in a single vote a package of amendments that added funds for Overture, wiped out a proposed bus fare increase and more.
"I don't see it as of yet, but I don't ever say never," Schmidt said.
All told, Soglin's proposal increases spending 3 percent due mainly to rising employee compensation and debt payment costs. The budget raises overall tax collections by 2.5 percent to $198.1 million and raises taxes by 1.5 percent to $2,192.34 on the average home now valued at $230,831.
The city, which saw property values grow just 0.47 percent, largely due to the strength of commercial land, got some good news on revenues.
State aid is up 2.2 percent to $35 million, building permit revenue jumped 33 percent to $4 million due to increased construction activity, and room tax revenue rose 27 percent to $2.9 million compared to the adopted 2013 budget. But ambulance fee revenue dropped by $1.6 million from projections for 2013 due to a higher-than-expected share of Medicare reimbursements.