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Mayor Offers Cautions On 'Comfortable' New Kansas City Budget

Courtesy of City of Kansas City, Missouri

“This was a relatively pleasant budget process,” said Kansas City, Missouri, Mayor Sly James of the months leading up to Thursday's City Council approval of a $1.5 billion budget for the 2016-17 fiscal year.  Then his council colleagues laughed as he added, “We actually had money.  That always makes it a little easier.”

The new spending plan includes funding for 2 percent raises for city employees who have been hit by wage freezes in several recent years.

The budget also includes a 5 percent increase in expenditures for basic city services and the first year's funding for a project to sell some of the city's abandoned houses to be refurbished and tear down the rest of the 800 or so dangerous properties.

At the last minute the city agreed to 2.6 percent raises for firefighters and other compromises with the union that make a future wage freeze for them far less likely.

But the mayor had some cautions, and in making them he emphasized that the budget and city finances are easily misunderstood.

“We keep talking about money coming out of a $1.5 billion budget,” he said.  “And although that is technically true the money is coming out of a $530 million general fund.  It's not coming out of airport and it's not coming out of water.” 

Various discrete funds must be kept separate from general city spending as part of the budgeting process.

The mayor warned that more than 78 percent of the general fund is now committed to public safety services such as police, fire and ambulance services, and that granting the extra .6 percent raise to firefighters likely means police officers will soon want and expect similar raises.

This, he said, is combined with a five-year forecast that predicts that revenue growth will peak in 2018 and taper off sharply thereafter.

Finally, James emphasizes that the 2016-2017 budget is based on the expectation that voters will again renew the city's earnings tax in April. The tax accounts for approximately 40 percent of the money that flows into the general fund.  James believes the voters, as  they did five years ago, will not opt to phase-out the tax.

If the earnings tax is not renewed, the mayor and City Manager Troy Schulte say the result could be the elimination of up to 2,200 city jobs over the ten-year phase-out period.

The largest group of city employees and thus the largest job losses would be in police, fire and ambulance services.

Steve Bell is afternoon news anchor and business news reporter for KCUR.  He may be reached at 816-235-5173 or by e-mail as steveb@kcur.org

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