RACINE - It's early in the process, but Mayor John Dickert got the city budget ball rolling Tuesday night with the annual budget address to the City Council.
In his speech, Dickert outlined the difficulties with the budget and what he considered some of the triumphs - a second year in a row with no layoffs and no major cuts to services.
One of Dickert's biggest triumphs, he said, was keeping the tax levy increase to 1 percent. That's the amount of money property taxpayers chip in to run city government.
City taxpayers in 2011 will kick in $46,273,785, up from $45,048,785 in 2010, an increase of 2.72 percent, according to the proposed 2011 city budget. That includes the tax levy increase and debt service, which the city cannot control, Dickert said.
City spending increased from $189,190,101 in 2010 to $193,091,619 in 2011, an increase of a little more than 2 percent.
The budget assumes no increase in salaries for city employees for 2011. The city will be negotiating contracts with many of its unions in the coming year.
When he started planning for the 2011 city budget, Dickert said he asked all the city department heads to come back with a zero-percent increase in their budgets. That's what they did.
Then, Dickert said, the city got hit with an increase in retirement costs and a drop in shared revenue (the amount of money the city gets back from the state). Together, that added up to about $1 million that the city had to make up.
That was a 2 percent increase in the tax levy right out the box, before the budget process even started, Dickert said. Through some modifications and getting a little smarter budgeting, Dickert said city staff was able to get that number down to 1 percent, but didn't explain where that 1 percent came from.
As of Tuesday, city officials had not completed the estimated tax rate because they are still waiting for assessment information from the state, said City Administrator Tom Friedel.
City officials didn't even want to hazard a guess, because it has been such a volatile year as far as assessments are concerned, Friedel said. Last year's tax rate was $10.84 per $1,000 of assessed property value. If you're trying to figure out what you'd pay in city property taxes on a $100,000, $150,000 or $200,000 home,
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you'll have to wait until November.
Despite a tight budget, Dickert said, one thing he doesn't want to sacrifice is quality-of-life issues. The 2010 budget includes work in the parks, extension of bike paths and other things.
"The fact is you have to keep the quality-of-life issues up here. We're still going to keep our beaches clean. We're doing all those things to make sure this is a destination city," Dickert said.
A couple of things that helped with the budget process this year included switching to LED lights; those helped the city reduce electricity bills. Instead of saving 40 percent, it saved the city 60 percent on utility costs, Dickert said.
The city got a lot of grief for switching to recycling carts, which city officials said would save the city money. There was enough savings from the program that city residents will see their annual fee drop from $10 to $5 to pay off the carts, Dickert said.
Dickert said he'll entertain any suggested cuts from the City Council, but he'll veto any proposals that would increase the levy. So city officials have to look at different ways of doing things, like courting new businesses in an effort to create new jobs.
"We've got to bring in the revenue to start stabilizing this economy. You can only cut so far. There's no more fat; this is muscle and bone we're cutting right now.
"There is nothing else to cut here. After this it's services," Dickert said. "We've got to increase our tax base and that will get us a more stable budget."
Before he even introduced the 2011 city budget, Dickert had already started thinking ahead to 2012. Once the city wraps up this budget, Dickert said he and staff will start working on the next one.
"We're anticipating a 5 to 10 percent cut in shared revenue. Now, if there isn't one, trust me, I'll be dancing in the streets. We're preparing just in case," Dickert said. "I don't want to get caught unprepared, and I'm not going to shift that whole thing to the taxpayers."