Over at City Hall, the second-quarter revenue figures are in and, surprise, they're grim. The notorious police furloughs (remember them?) that began about a month ago were part of an effort by the Franklin administration to slash spending by $40 million. But, according to the latest projections, the city may need to cut another $40 million to avoid a year-end deficit.
If this situation sounds dire, you bet your ass it is. Franklin herself was scheduled to deliver the bad news to the Council Finance Committee, but for reasons unexplained, she left the unpleasant task to COO Greg Giornelli.
To bring you up to speed: The city began its fiscal year on July 1 with a $570 million budget. By the end of the first quarter, revenues were already running $14 million lower than anticipated which meant the city was looking at a $55 million budget shortfall, providing the downward trend held steady. So the mayor announced city-wide furloughs and closed City Hall on Fridays to save money.
What we learned today, however, is that the downward trend hasn't held steady it's gotten worse.
Instead of taking in $570 million, the city may end up the fiscal year with less than $497 million. Revenue from building permits has slumped more than 60 percent, for obvious reasons. Sales tax receipts are down. Property tax collections are down. License fees revenue is down. And so forth.
The only real upswing is in fines as the city cracks down on scofflaws and rule-flouters though not parking tickets, because City Hall laid off its meter maids months ago and still hasn't hired a private contractor to handle enforcement (not that I'm suggesting anyone use this knowledge for personal gain ).
Currently, the administration is projecting an annual revenue shortfall of as much as $80 million with one major caveat. The financial impact of the staff furloughs will not be known for another two weeks or so, Giornelli explained. At that point, he said, the administration will reassess the situation and, in all likelihood, embark on "cuts in non-personnel expenditures."
What does that mean? I asked Giornelli as he left the committee meeting on his way to a budget huddle in Franklin's office. The short answer is, they don't know yet.
So far, Franklin has made the unpopular decisions about who and what to cut. Should we expect the City Council to step up to the plate and offer a workable solution? Sadly, I wouldn't bank on it. Even on the Council Finance Committee, there are dim bulbs who despite being in office literally for decades lack even the most basic understanding of the budgeting process and rudimentary accounting. (Don't take my word for this; watch the video once it's been uploaded if you want a good cringe.)
Just to be clear, if the data presented this afternoon is correct, the shortfall is not the result of over-spending. Just the opposite the city's spending is running 4 percent under budget. Unfortunately, it now looks as if City Hall will have to cut spending by about 12 percent.
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