Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, April 10, 1991 TAG: 9104100330
SECTION: VIRGINIA PAGE: B-1 EDITION: METRO
SOURCE: JOEL TURNER MUNICIPAL WRITER
DATELINE: LENGTH: Medium
The numbers tell the story of the financial crunch for Roanoke as Herbert prepares to release his proposed budget for the next fiscal year.
If times were good, the city could have expected $9.3 million in new money to pay for schools; salary raises for teachers and municipal workers; and rising costs of fuel, trash disposal, postage, health insurance and other items.
But times are bad.
"It's the worst I've seen in the 15 years I've been here," said city Finance Director Joel Schlanger.
So the city will have only $54,387 more than it did this year to operate schools, provide police and fire protection, pick up garbage and provide dozens of other services. That will be the net increase in the city's $152 million budget.
Even that figure is misleading because the additional money must be used for specific welfare programs required by the state.
"As good as that $54,387 in the gross figure might look, it is not money I can spend to soften the blow in other categories," Herbert said.
For practical purposes, the city must operate with less money.
Herbert would not discuss the details until he presents the budget Monday to City Council. But the city manager said both he and School Superintendent Frank Tota had to make significant cuts to balance the budget.
Herbert said he tried to trim the budget in a way that wouldn't have a major impact on services or residents. He thinks he has done that, but he won't know whether residents agree until the budget is made public.
"We've had to make some decisions that will take the sparkle off some services, but no dramatic changes," he said.
Herbert said no city workers will be laid off - one of his objectives from the start.
"Most city employees said they would rather work harder and not get a pay raise as long as their fellow workers didn't get laid off," Schlanger said.
But many jobs will remain vacant. The city has 50 openings and the number is likely to increase.
What caused the financial squeeze?
A big cut in state money, along with a growth in local taxes that will be less than half the rate of recent years.
The city budget is funded by two main sources: local taxes and fees - which provide 65 percent of the money - and state aid for schools, highways, jail, courts and other services.
The city also receives a small amount of federal money, but that has gone down sharply in recent years.
In the past 10 years, local taxes and fees have increased an average of 5.9 percent a year. State aid has risen an average of 6.3 percent a year.
If revenues increased by the same percentage next year, the city would have had $9.3 million in additional funds.
But Roanoke, like many localities, is hurt by deep cuts in state aid and by an economic slump that has slowed the growth in local taxes.
As a result, city revenues will increase by .04 percent in the fiscal year that begins July 1, Herbert said.
Because of its own budget problems, the state will reduce aid to Roanoke by 4.8 percent, or $2.7 million, next year.
"That is an actual loss. We will get that much less money from the state. It's a dramatic change," Schlanger said.
Schlanger said there has been a swing of more than $5 million in state money for Roanoke in two years. State aid increased by $2.4 million in the past year. If the trend had continued, the city could have expected an additional $3 million in state money next year.
"They are cutting us more than they increased us last year, so we will be below the level we were two years ago," Schlanger said.
Because of the economy, the growth in local taxes and fees will barely offset the reduction in state aid, Schlanger said. Local revenues are projected to increase by $2.75 million, or 2.9 percent. The average annual growth in the past decade had been 5.9 percent.
He said the major keys of economic activity are down: retail and automobile sales, admissions and prepared-food taxes.
"It is nothing to brag about, but thank goodness it is 2.9 percent," Schlanger said. In many localities in Virginia, local revenues are expected to decrease, he said. "We are lucky in Roanoke because the diversification of our economy is paying off."
City Council members have said they are in no mood to raise taxes to offset state funding cuts. "We are going to have to live within our means. It is not going to be pretty and it is not going to be easy," Councilman David Bowers said earlier in the budget process.
"Why should localities raise taxes to make up the state's shortfall?" Vice Mayor Howard Musser said.
by CNB