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Newport's 2009/2010 Tax Levy
Increased 2.88%
o Over the last 3 years, Newport has had the lowest
cumulative tax rate increase of any Rhode Island city
or town!
o But! … continues to be based on …
"A Hope and A Prayer" with a bit of magic
thrown in!
This Year's Hopes:
A. Three more unions (Fire/NEA/ASME) will accept 0%
raises for 2009/2010 (each 1% raise = $125,000)
B. Short-Sided Capital Budgeting Strategies
C. Police Overtime Spending achieves a record low!
(with 7 fewer officers)
D. Property Abatements are not above the historical
average ($1,000,000) during a reassessment year.
This Year's Prayers:
A. State Funding Holds
o Motor Vehicle Revenue reduced $400,000 ($1.4 million
more reductions to come?)
o Hotel Tax, Meals and Beverage Tax, Gambling Revenue
($3.6 million at stake?)
B. Someone else figures out how to pay OPEB Benefits
o Reduced Funding by $1,000,000 for 2010
o Now Short $1,500,000 per year in funding
This Year's Magic:
A. City moves $588,000 from general city expenses
to Enterprise Funds (Water, Parking, Eastons Beach)
The Future:
A. Required Pension Funding next year to increase
over $1,500,000
B. OPEB - not going away - $1,500,000 short
C. Employee Salary and Benefits
o 1% Salary Increase = $200,000
o Firefighters and Police pay less than 10% of Health
Premiums
D. Continued use of Road Repair Account and Bond Issues
as General Fund "expense" cushions
E. State Funding
o Motor Vehicles Tax up at least 20% maybe doubling?
o School Funding Formula - millions at stake?
F. Trash Collection Revenue?
o Enterprise Account Set-up?
o $2 million of possibilities
The Bottom Line:
A. There's a $3-$4 million structural disconnect in
Newport's budget
B. Some Leaders in city government "Get It"
and "Offer Solutions"
The rest live on hopes, prayers & magic!!
Notes created by Mark Colborn for ALN Forum September
28, 2009
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