MAYOR ORDERS DEP’T HEADS CUT BUDGET BY 10% ACROSS THE BOARD

MAYOR ORDERS DEP’T HEADS CUT BUDGET BY 10% ACROSS THE BOARD: PNN has confirmed rumors that Mayor Bernard Carvalho has instructed all department heads to cut their budgets by 10% across the board in the budget currently being complied by the administration.

Although a 5% figure had been tossed around in reports PNN received from various county employees, administration spokesperson Mary Daubert confirmed the 10% reduction yesterday saying that “(t)he Mayor asked each department head to reduce his or her budget by 10%, not 5%. He did not specify how the department head was to reach that 10% reduction.”

The 5% figure was also mentioned by members of the Police Commission at their public meeting last Friday.

Carvalho’s administration has been tightlipped about specifics in putting together the 2009-10 budget so far except for saying that “we are anticipating a ten to fifteen percent decline in revenues from both local and state sources, and have advised department heads to reduce their budgets accordingly” in his testimony to the state legislature on January 13.

Although that testimony spoke of specifics such as a hiring freeze, a pay freeze for himself and department heads, the discontinuation of the mayor’s car allowance and savings in “energy use” this is the first indication of an “across the board” budget cut as opposed to “surgical trimming” of specific programs as the state and the other counties have sought in their budgets.

Despite the claimed “hiring freeze” the administration recently hired at least three new employees as “park rangers” as widely publicized, essentially in order to enforce new regulations allowing dogs on the east side bike path.

During the campaign, in a debate sponsored by the local newspaper, Carvalho angrily boasted that he would “not cut any programs” after his opponent JoAnn Yukimura said the new mayor would have to make cuts somewhere and stated that Carvalho did not understand the budgeting process.

According to the county charter the mayor’s new budget is due on the council’s table on or before March 15 for slicing and dicing during a series of council budget hearings with all department heads coming before the council to justify their budgets.

Although the charter calls for a balanced budget and requires the council publish “a summary of the estimated revenues, including any new sources of revenues, and expenditures” upon receipt of the mayor’s budget, it does not define how the total of income is to be tabulated.

Councilperson Jay Furfaro, formerly Chair of the council’s Finance Committee has called for a local version of the state’s council of revenue to give the council a figure they can work from.

The current practice of the council has been to take the tabulation of all of the assessments of all properties on the island and set a “real property tax rate” sufficient to “balance” the budget.

The county’s only source of taxation revenue is from property taxes according to the state constitution.

The setting of the tax rate has been controversial over the past 10 years of increasing assessments since the council has been able to raise the amount of actually revenues received through tax collections while technically being able to claim to have maintained or even “lowered the real property tax” often leaving out the word “rate” at the end.

According to the charter the mayor also is required to submit suggested modifications to the budget by May 8 which is followed by a public hearing on the budget before the council.

There is no public hearing mandated before the council’s deliberations begin although one has been requested many times over the years by members of the public and some councilmembers.

During the process the council is allowed to “reduce any item or items in the mayor's proposed budget by a majority vote and may increase any item or items therein or add new items thereto by an affirmative vote of two-thirds of the entire membership”.

The charter also says that “(a)mendments to the adopted annual budget ordinance may be submitted by the mayor... but no amendment shall increase the aggregate of authorized expenditures to any amount greater than the estimate of revenues for the fiscal year.”

The council must then pass a budget on or before June 7 or the mayor’s original budget submitted in March takes effect automatically.

Section 19 of the charter on “Financial Procedures” does not require the mayor’s signature on the budget for it to become law.

The current charter provision for the budget process was added in 1992 following bitter budget battles during a time when the charter was basically silent about what would happen if the mayor vetoed the budget and the council didn’t override the veto by the beginning of the next fiscal year.

Despite a public outcry for the televising of the budget hearings over the past few years it is expected that the council will not honor that request again this year and is expected to conduct their deliberations as secretly as possible under the open meetings provisions in the state sunshine law.