Economic and budget prospects for the year ahead

We are now in the third year of Ventura's successful Three Year Plan to balance our City's General Fund budget. Our goals at the outset were simple, clear and straightforward:

• Eliminate the chronic structural deficit where expenses were rising faster than revenue, opening a widening gap between our commitments and our capacity.
  
• Create additional capacity to address long neglected community priorities:
  
  Address the near-tripling of 911 calls by adding new police and fire staffing
  Invest in our aging infrastructure, particularly streets
  Maintain park maintenance in the face of 33% more greenspace and 25% less staffing Bring salaries and benefits back to competitive levels for all city staff

Strong fiscal discipline and a strong economy achieved the first goal and carried us a long way toward the key priorities of the second goal. We’ve added 10 police officers and firefighters. We’ve invested a half million of annual additional General Fund dollars into street repair and tapped other resources to fund a major infusion of park, building, water, wastewater and other capital projects. We’ve kept competitive on sworn police compensation and made up major ground across other units.

We intend to continue that progress in the year ahead. But the deteriorating economy will make that a tougher challenge. Although we’ve been aided in the last two budgets by strong property tax growth, we are now looking at significantly lower growth in both sales and property tax. Next year, our current projections show expenses again growing faster than revenue, creating a budget gap of approximately $1.8 million. That is a conservative estimate, because it does not include any pay adjustments for 80% of the City's workforce (sworn police officers have a raise coming in the final year of their three-year contract.)

I am confident we can overcome next year’s challenges by:

• Eliminating, reducing or restructuring lower-priority programs and services to free up resources to fund “what matters most.”


• Seeking additional revenue through economic development; shifting a greater share of the cost of services to user fees; and seeking innovative new sources of revenue.
  
• Scaling back or postpone anticipated further commitments to our four key priorities.

What is frankly more problematic than balancing next year’s budget is the reality that the economic downturn may be deeper or longer lasting than currently predicted by mainstream economic opinion. For the last year, optimistic expectations about “a soft landing” for housing and the national economy have consistently had to be revised downward. The falling price of residential real estate, the rising price of oil, the declining dollar, the continuing turmoil in international credit markets all work against a quick recovery. In Sacramento, the looming $10 billion dollar deficit has sparked calls by Republican lawmakers for Governor Schwarzenegger to declare a “fiscal crisis” and call the Legislature into session under emergency powers spelled out in Proposition 58.

That is why it is so important for the community to take the long view. We’ve had success over the last three years by realizing that short-term thinking is not the way to solve long-term challenges. We will have success in the years ahead by keeping our focus on our key priorities – and remaining committed to achieving the Ventura Vision.