A rising economy has Tacoma City Council members eager to restore services they slashed in the the recession, but they’ll be constrained by a projected $6.7 million deficit over the next two years.
Tacoma’s top finance officials revealed the red ink during a council meeting Tuesday afternoon. It will shape the roughly $427 million two-year general fund budget the council is expected to develop over the next five months.
The good news, city leaders said, is that the deficit is far smaller than the more than $60 million hole they addressed in 2012 by eliminating jobs, deferring maintenance and raising fees.
That means they likely won’t have to turn to such drastic measures while trying to balance the budget this time.
“It’s going to be challenging, but we are at a far different place than a $60 million structural gap; $6.7 million is a little bit more manageable,” City Manager T.C. Broadnax said.
Council members in recent months have expressed a desire to restore law enforcement staffing they cut between 2010 and 2014, as well as to put more money into improving other public services. Several of them made those points when they reviewed Broadnax’s job performance earlier this year.
“We just have to be thoughtful and very balanced, and understand that as we go into budgeting, we are focused on our core services,” Mayor Marilyn Strickland said.
Tacoma’s anticipated general fund spending in 2017-18 is about $40 million more than it allocated in the 2011-12 budget. Wages and health care for city employees have been climbing since the recession, accounting for much of the increase.
Broadnax’s budget team projected rising city revenues over the next several years, but at a slower pace than recent gains. Sales tax revenues, for instance, have climbed at a rate of 3.7 percent per year since 2011. Going forward, the city projects an increase of 2.9 percent per year.
“You can’t assume we’re going to have that kind of growth (the 3.7 percent) forever,” said Andy Cherullo, the city’s chief financial officer.
Overall, the report released this week anticipates a 1.8 percent increase in revenue through 2018, but a 2.7 percent increase in city spending.
A couple of City Council members suggested the report was too conservative in projecting revenue increases. Strickland replied that “being overly optimistic is what got us into a $60 million hole.”