When the weak national economy first began taking its toll on municipal budgets in about 2008, residents would occasionally ask me how long New Rochelle could withstand the fiscal stress. My best guess was that by making prudent choices — painful, but bearable — the city could probably get by for two or three years.

It is now year four.

Today, the City Manager released his draft budget for 2012. (You can view the full budget here and a press release summarizing its contents here.) It is not a pretty document.

We enter the fiscal year with a gap of $8 million between anticipated revenues and the cost of delivering services at status quo levels — that’s out of a total operating budget of roughly $108 million. This gap results primarily from increases in State-mandated health insurance expenses, State-mandated contributions to the NYS Retirement system, and the need to reestablish the City’s depleted fund balance (essentially our rainy day and emergency reserve account.)

The City Manager’s budget proposes to close this gap through a roughly even split of spending cuts and revenue increases, principally:

  • The elimination of 36 full-time positions, 24 by attrition and 12 through lay-offs, spread across all of our major departments. Keep in mind that the City had already eliminated 57 other full-time positions during the past two years. Our workforce would be the smallest in many decades — probably the smallest since the Great Depression.
  • The lay-off of 18 part-time positions, all crossing guards, and the consequent elimination of the crossing guard program.
  • An increase in the City portion of the property tax levy of 3.68%, which translates into a cost of approximately $184 per year for the average homeowner. This levy increase is consistent with the recently-adopted New York State property tax cap, which permits a baseline increase of 2%, plus an adjustment for a portion of pension costs equal to 1.68%.
  • An increase in the residential refuse fee of $157 per dwelling unit. Under this proposal, the refuse fee would now cover the full cost of sanitation, ending the financial contribution to this service by property taxpayers.

None of these measures will be popular, and all of them will have negative impacts on our community.

The hundreds of specific line items within the City Manager’s proposal were not known until today, but the budget’s overall tone of sacrifice and austerity is not surprising. The trends that shape our municipal finances have been tracked and discussed publicly for years. In fact, at the time of our last budget cycle, I wrote a series of posts to illustrate the City’s fiscal condition and options. While some of the statistics need to be updated, the central points and narrative in these posts still apply today, and I encourage you to read them here for relevant background.

In addition, during the recent campaign, I made a point of acknowledging forthrightly the scale of our fiscal challenges. I don’t think much of politicians who paint pretty pictures the day before an election, only to reveal unpleasant truths the day after, and so I was determined to speak candidly about our budget.

Nonetheless, the fact that the budget’s general content was predictable does not make it any more pleasing. These are tough measures that require careful reflection and sober decision-making.

The City Council will now have several weeks in which to discuss the City Manager’s proposal, consider alternatives, and receive public input. I am not yet prepared to pass judgment on any of the specific elements within the budget, let alone on the the document as a whole. And if past experience is any guide, the Council will likely adopt amendments and changes, before approving a final budget at the end of the year. But the unavoidable truth, driven by mathematics, and not by intent or ideology, is that every possible choice will be difficult and objectionable. Pick your poison.

I will have more to say about this subject in the weeks ahead, after having an opportunity to review the budget in greater depth and considering its implications. For now, let me close with this observation: the very worst way to meet a short-term fiscal challenge, even a very severe fiscal challenge, is to jettison our community’s long-term needs and interests. As we pick our way through a minefield of spending cuts and revenue increases, let us set priorities that can best position New Rochelle for fiscal stability and economic growth in the future. Such priorities may not be easy to act upon this day, but will lay the surest path to better days.