Special Board of Aldermen 07-01-2021 Page 9
something that basically happened less than a month ago with the passage of Senate Bill 52 and its
approval by the Governor. So yes it does seem last minute but as has been repeated many times, this has
no effect on the amount of money we are going to raise from taxes. It’s just a more accurate reflection of
the fact that we are getting revenue and spending that revenue from a source other than taxation. Itis
what has been done for many years but the proper way to account for it, given the current state of the law,
is to include both sides; the revenue side and the expenditure side in the budget.
Alderman Jette
Obviously you think that by doing this that this will work, this will allow us to accept the grant money? |
understand how putting it in this year’s budget assuming that everything else stays the same, putting it in
this year’s budget will give us more room to expand next year because it will be putting in this year’s
budget these appropriations that when we spend this grant money it will give us a higher starting point. |
guess | am not sure why we wouldn’t be able to accept the grant money. | understand with all apologies to
Mr. Teeboom | think the spending cap, | think a lot of people understand but | think a lot of people don’t
understand that the spending cap is not a tax cap, it is a spending cap. And in its worse effect, it prevents
us from spending money even though that money might not come from the taxpayers at all and that’s the
problem that you are trying to solve here at least in part that this money that we are getting from the
Federal Government or State Grants or gifts, count in the limit on the appropriation also it doesn’t take into
consideration if the tax base increases as property values go up or new businesses come in, new
apartment buildings are built and the tax base increases, which would allow us to reduce taxes because of
the increased share of the burden. We are still limited on what we can spend and | think that’s a flaw in
the current law and if we have to live with that, it is going to make it difficult.
It doesn’t necessarily reduce the tax rate, it reduces the amount that we can spend - whatever the source
of that money might be. | understand that part of it, | didn’t realize that we wouldn't be able to even accept
this money during the next fiscal year without making these changes.
Attorney Bolton
Shall | respond? The issue is that grants were not included in the budget last year. So if you just look at
what was in the budget last year and then say that the total appropriations in this year including any
supplemental appropriations in the course of the year have to stay beneath this cap, you would be looking
at last year’s budget which did not have the grants in it. Today you can appropriate this money as it is
being called “Contingency Grants”. So you can do the appropriation now, this resurrection of the spending
cap does not go into effect until sometime in August. But to accept and appropriate grant money after this,
after that August date, that’s an appropriate. So if we don’t appropriate before that date, we are going to
run up against this limit. This limit is going to enable something like $3 million dollars in excess of last
year’s total budgeted expenditures which didn’t consider grants.
The reason for that is they hadn’t been considered in many years after the original passage of the
spending cap charter provisions, the Board of Aldermen adopted an Ordinance intended to explain and
define things in the spending cap provisions and so they defined combined annual municipal budget as
excluding expenditures from grants. | believe the current state of the State Law which governs us would
render those Ordinances null and void. Now if you want to exclude things like grants and other monies
that aren’t raised from taxes, it has to be a provision in the Charter itself. Our Charter doesn’t have those
provisions. So if we are going to make a change in the accounting, now is the time to do it.
President Wilshire
All set Alderman Jette?
