The City of Bloomington currently has $19.5 million in the general fund, but financial advisors warn of uncertain times ahead. (WJBC file photo)
By Zach Dietmeier
BLOOMINGTON - As the Bloomington City Council approves a property tax levy cut, a project budget surplus is promoting financial caution.
The six month financial report showed an optimistic outlook for fiscal year 2013, but city budget manager Tim Irvin warns against jumping to conclusions.
"Now when you think of budget projection, things that come to mind are that they are estimates and that they scratch the surface," said Irvin. "What I mean is that projections are just basic estimates."
Irvin points to $5 million gap between revenues and expected financial requests and expenditures at the beginning of fiscal year 2014 in May. Deferred equipment replacement plays into that gap, and the council approved $1.5 million to purchase new automated garbage trucks in a continuing effort to upgrade services.
Irvin also said it's important to remember that gains during the first six months of fiscal year 2013 can quickly turn to deficits.
"The assumptions we've made in this report remain very conservative and very careful," said Irvin. "You cannot use projections as substitutes for solid business planning. More than ever as we approach the fiscal cliff we must keep in mind that solid planning is a must."
The $19.5 million in the general fund is a good thing, especially in comparison to extremely low numbers in 2008, but recent trends of up and down years are a concern.
"I've said many times to the city council and to the residents that one of the primary goals of the council and city staff should be to eliminate the cyclical performance," said Irvin. "We must flatten this out."
Irvin said the city should strive for financial consistency despite uncertain times.
"By flattening out the finances, we can address some of our longterm needs like pensions and infrastructure," said Irvin.
Bloomington residents can expect lower property taxes after the city council approved a decresed tax levy on Monday. The owner of a $150,000 home will pay 655 dollars in property taxes during 2014. Mayor Steve Stockton says people deserve a break.
"One of the things we have said is important is home ownership in the community," said Stockton. "Keeping the property taxes low is one way to encourage home ownership, especially among people with fixed incomes or those who may not have a job right now."
The levy of $23.2 million is $400,000 less than last year.
Stockton added that spreading the burden around helps keep the levy down.
"A lot of this extra money is coming from sales taxes, which are paid by people from outside the community," said Stockton. "Much of the burden is being taken off the home owner and placed on a much larger group of people."
Alderman Rob Fazzini agreed and added that the level property tax levy over the last three years is just one contributor to a tax break this year.
"The quarter percent sales tax increase, the other incomes that we have managed to get, and the savings we have had on the expense side allows us to do things like [cut property taxes and boost our general fund], which saves us more money," said Fazzini.