budget

Where the Tax Increase Stands After First Reading

~ Tyler Williams ~ 1 Comment

Last Thursday, May 19th, City Council held its first reading on sending a 0.5% tax increase to the ballot. As I have written before, I believe that this increase is necessary to ensure that vital services in the city continue and are improved. I will try not to belabor this point, but instead want to focus on the tactics taken by certain council members during last weeks meeting.

The lone no vote on the first reading was Lonnie Stuckert. This vote came as somewhat of a surprise to me, as well as to some other observers, but was not altogether shocking. Mr. Stuckert has spoken against tax increases since his campaign, as did his father (who he replaced as 2nd Ward representative). Unfortunately, Mr. Stuckert has failed to provide any concrete plans for cuts. He has said multiple times that there are alternatives, but has yet to present them. This is what is most frustrating to me. When somebody makes the decision to run for council, they must be prepared to present solutions to problems, and not just be a naysayer. For Mr. Stuckert to come to the last meeting unprepared for the criticisms that he has fairly received about his lack of plans is not acceptable. This conversation has been ongoing since the first council meeting of the year, and there was a special council meeting the previous week. I hope that he does present some of his ideas soon, because I believe that it is important for council to continue to discuss fiscal responsibility and the future of the city. Until then, Mr. Stuckert cannot lead members of the community to believe that this problem can be fixed without a revenue increase and not be willing to lead that charge with concrete ideas. It is too late in the process for nebulous proposals.

Councilwoman Randi Milburn has also been on the fence about putting a tax increase on the ballot, but she did end up voting yes on the first reading. My hope is the Mrs. Milburn will work with the other members of the finance committee to work on a long-term plan that focuses on responsible spending for the city. It is easy to talk about budgeting responsibility, but as a member of finance committee, she can be an integral part in leading that charge. As to a bully campaign, however, it is important to separate presenting facts and bullying voters. It is necessary to let voters know what will be cut if the tax increase does not pass, even if that does include police. There needs to be a campaign about the reality of the dire situation we are in. However, I believe this can be done tactfully and in a non-threatening way.

It will be interesting to see how this plays out for second and third reading. I hope that the council members who have been skeptical will either present alternatives or throw their support behind the plan. The tax increase can succeed at the ballot behind the full support of council, and with plans to control spending in the future. Mrs. Milburn and Mr. Stuckert are right in that we must be prudent. However, the reality is clear-the City of Wilmington is in financial trouble due to a wide variety of factors, and the cuts that would have to be made to get to even in the budget would be extremely painful to those working for the city and for residents of the city. Fiscal responsibility and tax increases are not mutually exclusive, nor should they be. Everyone’s voices should be heard as council moves forward, and it is vital for citizens to know that the tax increase is needed and that the money coming in will be spent in a manner that is responsible and desirable for members of the community.

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EDITORIAL: The Time for Action is Now in Wilmington City Council

~ Tyler Williams ~ Leave a comment

As I wrote last Monday, Wilmington is experiencing serious issues with it’s budget situation. The city budget for 2016 showed a deficit of $1.3 million, and the agreement between council seemed to be that they needed to act soon. This, after a November city council meeting where council said that they would continue the discussion and that they recognized how quickly it needed to happen.

We are now at the beginning of March. Today, March 2nd, the Finance Committee of council had just their second meeting of the year from my understanding. I decided to go, to see if the members of the Finance Committee were going to follow through with their promise to consider options.

The budget discussion started out with Mayor John Stanforth saying that he would be putting a plan for cuts to balance the budget. He then asked for permission from Auditor David Hollingsworth to work with Deputy Auditor Mary Kay Vance on budget issues. I am not sure why this conversation hasn’t happened yet, but Hollingsworth said that was fine, as he would not be available much until after tax season. Stanforth went on to say that the city was broke, and Hollingsworth agreed.

Councilwoman Kelsey Swindler subsequently brought the issue of putting a tax on the ballot–the same discussion that council was having last year, but that nobody has discussed this year. Finance Committee Chair Mark McKay said that he wanted to give the mayor time to show how the cuts would look before they moved on the tax issue. Swindler responded that these needed to be in motion at the same time. McKay subsequently said that he needs more info, like a public forum where the public could decide whether council should put forth a property tax levy or an earnings tax on the ballot. I immediately posed the question, “Isn’t the tax the public forum?” Councilwoman Milburn then said she wanted to learn more about the numbers for each tax. Swindler and McKay both said that they were leaning towards an earnings tax, partially because they believe it to be more fair. Mr. McKay eventually added that he has heard some people saying it is time to put it on the ballot. The committee asked Clerk of Council Marian Miller to provide them with estimated revenue from the potential taxes for discussion at their next meeting.

During the meeting, Councilman McKay continued to show that he is not willing to make the tough decisions when it counts. He was perfectly willing to allow the tax to be debated in public before the committee and/or council moved forward on it. As the meeting went on, he backed off several times as soon as he was challenged. Mrs. Milburn ran on a no tax increase platform, so it is difficult to tell how she truly feels about the tax increase. She seems to have decided it is acceptable to put the tax to voters.

I left the meeting wondering-if Mr. McKay and Mrs. Milburn had not been questioned on their reluctance to put a tax increase on the ballot, what would have been accomplished? Would we all be waiting for the mayor’s office to come up with potential budget cuts so the committee can pour over them? Time is of the essence on an issue like this. It would be a great disappointment if council missed a chance to get it on the November ballot because of feet-dragging. At the end of the meeting, Mr. McKay said that “we’ll try to keep Kelsey happy.” Hopefully, this is not the only impetus for action in the future.

Wilmington Hampered by Budget Shortfall, Inaction

~ Tyler Williams ~ 4 Comments

At the Wilmington City Council meeting on January 7, 2016–the first council meeting of the year–City Auditor David Hollingsworth issued a dire warning to the council. If spending and revenue stay the same, the budget deficit for 2016 will be roughly $1.3 million. During 2015, the deficit was $925,000. All told, the city’s General Fund carryover for the end of 2016 could be down to $416,000 from $2.7 million at the end of 2014 (and closer to $8 million just a few years prior). Hollingsworth expressed concern about what the small carryover could do both for the flexibility of spending for the city and the bond rating for the city. He acknowledged that he is not able to make legislative decisions regarding the budget, but that he was counting on council to decide what happens.

And therein lies the problem…

So, what has city council done? After Mr. Hollingsworth’s presentation, Councilperson Mark McKay said that as the Finance committee chair, this was their number one issue on the agenda. One would assume that Finance committee, led by Mr. McKay, would be exploring all options. However, there is no evidence of this happening. In fact, as of the council meeting on February 18th, there had been only one finance committee meeting the entire year. Reports at City Council meetings from the Finance committee have concerned only the transferring of miscellaneous funds, not updates on the progress towards addressing the deficit as one might hope.

The time for action is now

The proverbial can representing the City of Wilmington’s fiscal issues has been kicked for many years, and we are now seeing the point where it can be kicked no more. The City has been able to use its significant carryover from just shy of a decade ago to allow itself to keep taxes the same while working to cut some expenditures. Unfortunately, this has gotten the city to the point where it is today. Only a few council members in recent history have been willing to stand up and say that there is an issue that must be fixed, and this council’s hand has finally been forced.

The lack of discussion on real issues at the last two council meetings has been disappointing and, at times, embarrassing. A likely non-existent lead problem, bridge issues at the cemetery, an extended reading of a social media post, and a long presentation by an outside group have taken up at least half of the previous two council meetings. I believe that council takes this seriously, but this type of inaction at council makes any decision that council makes difficult to defend.

The Possibility of a Tax Levy

So what can council do? It seems like cutting, cutting, and cutting more has not quite worked. It is difficult for a city to make too many more cuts when so much of its money is geared towards necessary services. I am sure there are small cuts that departments can make, but these could certainly hurt some of the basic services. One option that City Council and Mayor Stanforth need to consider is an increase in the city income tax. There may be no other way around it at this point. However, this will be an uphill battle for council. Unfortunately, some have made ill-advised pledges not to raise taxes. This levy will need support from the city to pass. And it needs to happen soon. If council does not bring this to the discussion soon, they run the risk of rushing it to the ballot, which has the effect of leading to a backlash from the public.

This budget issue will be a focus for The Wilmington Bulletin in the coming months. Council must act to be a bellwether in the fight to balance the budget and help ensure Wilmington’s fiscal stability. If they don’t, it is residents of the city that will likely feel the consequences.