St. Petersburg Mayor Rick Baker has less than a year left in office. He's sitting on a $22 million surplus he helped build during the economy's boom years. It would be easy as a short-timer to spend the money and leave the problems for his successor. But the mayor's decision this week to cut the budget now to prepare the city for next year's bleaker budget indicates he still is looking for the best long-term answers for the city.
In the fiscal year that begins Oct. 1, the city is expected to face a 7 percent to 9 percent deficit in its $220 million general operating budget due to falling property and sales tax collections. In dollars, that's $15 million to $20 million in expenses the city will need to shed in a budget where more than one of every two dollars is spent on either police or fire protection.
Baker calls for using a combination of immediate pay cuts for nonunion workers, layoffs and a 2 percent across the board spending cut to whittle this year's expenditures by roughly $4.5 million. If continued in 2009-10, the cuts will mean savings of more than $7 million. That won't solve next year's problems, but it's a start.
The cuts will be painful for the 20 full-time workers who lose their jobs and the nonunion workers making more than $50,000 who will see a 2.5 percent pay cut starting in May. But that will look like the easy part as Baker goes about building his budget plan for the 2010 fiscal year.
To stave off more draconian cuts, Baker and the City Council will have to convince six unions — including those representing police officers and firefighters — to reopen their contracts and agree to freeze wages. With nonunion staff already sacrificing their pay, it's only fair that the unions be asked to forgo raises for next year. The alternative is more layoffs for both union members and other employees.
The unions are likely to pressure the city to raid its $22 million reserve to honor the union contracts during this tough economy. But that is shortsighted. Baker's philosophy that "one-time" money shouldn't be spent on recurring expenses, such as a police and fire raises, has merit. The city needs some level of reserves for emergencies such as hurricanes.
Baker says he is open to tapping reserves on a limited basis for some expenses — such as increased pension costs due to the dive in the stock market. That would make sense. But Baker and the City Council should work hard to protect most of that nest egg for its intended purpose: emergencies. And the unions should help them by coming back to the negotiating table.
The budget — and Baker's strategy for handling it — is sure to be at the forefront in this fall's mayoral and council races. But candidates, as they court union support, should be held accountable. If they have another idea for balancing the city's budget, they need to be specific about how they will make up the money.