City’s financial accomplishmentslaudable, but approach falls short

Apparently stung by recent criticism over the city budget process, Mount Airy City Manager Barbara Jones took the unusual step Thursday night of defending herself and her staff during the city’s board of commissioners meeting.

Over the past few weeks a few city residents — along with our own editorials — have been critical of some parts of the city budgeting process. Specifically, many have taken issue with talk of raising city taxes while the city year-end balance, or budget surplus, is almost $12 million, nearly enough to run the city a full year without a penny of revenue coming in.

Jones pointed out a few accomplishments that the city staff, along with the board of commissioners, can rightfully hang their hats on in recent years. Among those were:

– The city property tax rate has dropped from 63 cents per $100 of assessed valued in 2007 to its present 48 cents, a drop of nearly 24 percent. Most of that drop has come about in the past five years.

– During this same period, the city has built its year-end fund balance from $2.9 million to nearly $12 million. That lower figure was so low state auditors were beginning to look at the city with wary eyes.

– Generally, city services have improved over that same period, with many recreational opportunities added for Mount Airy residents.

In all of the discussion of budgets and expansion of city power and residents taking issue with some parts of government functions, it can be too easy to overlook such positive accomplishments. And these are not just positive steps — they are very rightfully described as astounding, given the economy and numerous challenges the city has faced.

Under Jones’ leadership, along with former Mayor Deborah Cochran and present city commissioners, Mount Airy has reached a point of financial strength that is, or should be, the envy of most municipal governments in North Carolina.

What much of the criticism has been about, and continues to focus on, is the fact that despite the fact that the city has done so well in building its reserves, in budgeting and managing conservatively, city staff continues claiming it’s on shaky financial ground, that its expenses will outpace its revenue so greatly that huge chunks of that hard-earned reserve will be swiped away.

We’ve all been hearing that story for several years, and it’s simply not happened. Part of that is because city staff, in developing its budget, tends to forecast the worst case scenario, with the highest level of expense possible forecast and the lowest level of revenue predicted.

There is some merit to this principle, but it can be taken too far. At this point, when the city administration claims $2 million or $3 million of the reserve may be taken simply to make a balanced budget, the truth is no one believes that statement. We seemingly hear something along these lines every year, yet it never happens.

We’re not suggesting the city should change the practice of conservative budgeting and management — though an eye toward being a little more realistic in projections would be most appreciated.

What we are suggesting is that, until city expenses actually do outpace city revenue, all discussion of a tax increase should simply go away. There’s no justification for it. And with a surplus this large, taking a one-year hit of $1 million or so before considering such a tax hike would do nothing to harm the city’s financial health.