Wilmington Hampered by Budget Shortfall, Inaction

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.