Last edited 8:43 a.m., Jan. 27, 2014The budget numbers, by themselves, aren’t enough to tell the story.
Not unlike peers across the state and country, the city of Springfield and Greene County governments manage tax dollars in silos dedicated toward parks and capital improvements, for instance, and seemingly the only taxes voters are willing to pass.
While the volatile Greene County operating budget is up slightly to $115.6 million compared to 2007, County Administrator Tim Smith said a glance at the numbers doesn’t reveal the stress on its officials and department managers. The general fund paints a more accurate picture, but there’s more to the story.
The general fund is under increasing pressure amid recent state and federal spending cuts, while Smith said county obligations are only growing. The general fund was at $40 million in 2008, the last year any raises were handed out. The 2014 general fund sits at $35 million, while the jail is bursting with inmates and a virtually unsupported federal election looms. Greene County voters recently rejected an Internet sales tax designed to give officials some breathing room, which leaves Smith and others nervous about what he calls “the workhorse fund.”
“The general fund is the fund that has to pay for anything that isn’t taken care of somewhere else,” Smith said. “It has more demand placed on it than it has resources.”
County sales and property taxes, as well as sheriff’s fees, make up the bulk of general fund revenue, which supports expenses at the county jail, the juvenile, recorder and prosecutor offices, and the sheriff’s department, among others.
The climate is different on the south side of Central Street, across from the Historic Courthouse where Smith clocks in. At the Busch Municipal Building, Springfield City Manager Greg Burris still manages a city with a hiring freeze in place on roughly 70 positions, but both the general fund and overall budget are headed in the right direction. Between Burris and Springfield Finance Director Mary Mannix Decker, there is a feeling the big storm has passed.
Burris said one key toward coming out of the recession in a financially secure position was voter approval of a 3/4-cent sales tax in 2009 to shore up the ailing police-fire pension fund.
“Without it, I don’t know that we’d be a financially stable city. We’d either be in bankruptcy or looming near bankruptcy,” Burris said. “I don’t think that’s being overly dramatic. We’ve seen cities around the country file for bankruptcy, and an underfunded pension plan is at least one component of what they’re facing.”
Burris pointed to a recent Wall Street Journal series that analyzed underfunded municipal pensions where the city of Springfield was used as an example for enacting steps to solve the problem. While it has worked in Springfield, only 55 percent of voters supported the tax – viewed by some as a bailout of the city – in November 2009, after a similar proposal failed months earlier.
For Burris, another key was to simultaneously tackle necessary cuts across all departments, including a citywide hiring freeze in place for more than two years. That was important because 60 percent of the city’s general fund comes from sales and use taxes, which fell substantially. According to the city, the general fund dropped by more than 10 percent between fiscal years 2008 and 2011, when it hit a recent low of $67 million. The fund has since rebounded, climbing an estimated 15 percent with 2014 budgeted at $77 million.
In an interview with Burris and Decker at the Busch building, the finance director said she recently was reviewing some of the cuts city departments faced in fiscal years 2009–11 and was relieved to be past that period.
“All city departments were treated the same. Even within our public safety departments – our police and fire – we had about 10 percent of positions that were vacant, and when you have 24/7 operations, that definitely impacted the service they were able to provide,” Decker said. “It was really hard going through that time, but it is really gratifying now.”
County officials are routinely at the mercy of state and federal officials and lawmakers, who have their own budget pressures to contend with. For example, Smith said the county pays more than its fair share for staffing the Juvenile Justice Center.
“That’s a piece of contention between us and the state. In theory, they are state-funded employees, but we pay 88 percent of their salaries,” Smith said.
Though there are two dedicated funding sources supporting law enforcement in the county via two sales taxes, the majority of that money goes to cities within the county. About two-thirds of the county’s general fund is consumed by law enforcement services.
“The general fund really hasn’t gone down that much. It’s gone down by a couple of million,” Smith said. “So, what’s the problem? The problem is that we’ve not been able to reduce our budget.”
Before the recession, law enforcement expenses made up 57 percent of the general fund. In 2014, they account for 65 percent – primarily because of per diem cuts to house criminals at the county jail charged with state crimes.
“That’s why most of the pain is felt in other departments. Take the commission departments – office supplies have been cut by 60 percent in the last four years. With travel and training, 90 percent has been cut,” Smith said. “Outside of law enforcement, we have cut everything.”
In 2014, Greene County is required to hold midterm elections that are typically supported by federal funds. With an estimated cost of $575,000 and federal funds for the midterm dropping below $20,000 from roughly $140,000, the county is in a pinch.
“Our mandates haven’t decreased. Our funding from (state and federal) sources has decreased. Our local revenue has decreased, but our business has increased. That’s the basic problem,” Smith said.
At City Hall, even with a Moody’s bond rating that improved during the recession to Aa1 – the top tier in the second highest category – and Government Finance Officers Association awards for crafting a quality budget, officials are not out of the woods.
In April, voters will have a chance to renew the police-fire pension sales tax another five years or until it is fully funded. Also, the city and county face an estimated $1.6 billion in combined environmental mandates related to stormwater, sewer and air quality improvements during the next 15 years.
“We still face volatility, but the city has a relatively stable position,” Decker said.
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