It’s the most contentious budget year in over a decade and as the public ramps up to officially weigh in, many key parts of the city’s $174 million budget remain undetermined or unclear
Above: Asheville by night, photo by Bill Rhodes.
From policing to the bus system to parks and sidewalks, there’s hardly any part of Ashevillians’ lives that the debate over the $174 million annual budget (you can read the whole thing here) doesn’t impact. But while that’s true in most years, this one is particularly contentious. The massive fight over a controversial proposal to expand policing downtown has taken center stage (yes, we’ve got the in-depth story on that debate), but questions over property taxes, transit, raises for city staff and bond funds also shape what’s become the biggest political fight over a city budget in over a decade.
Because of that public contention the Blade‘s covered a lot of aspects of the budget up close, even moreso than we have in the past. So this column will summarize and link to some of that, but I also feel the need to highlight an important fact: a lot can still change. Unusually late in the game, Council is posed to consider some budget overhauls at a briefing today at 4 p.m. So far, there’s no publicly released documents on what they might consider, but given some of the dilemmas elected officials are facing, it’s entirely possible some significant changes may emerge.
$174 million and a heap of controversy
Why has this budget year been so controversial? Basically the three big forces leading to political upheaval in Asheville’s government — issues of equity, the conduct of city staff and the gentrification crisis — continue to play out during this budget year, and have led to a lot more locals paying attention and demanding what they see as necessary. Here’s the specific parts of the budget where attention has focused, as well as one that’s key, but hasn’t received as much discussion:
The $1 million for police expansion — This has emerged as the single most controversial item in this year’s budget. Asheville Police Department Chief Tammy Hooper wants $1 million more a year to double the department’s downtown unit, claiming that an increase in downtown crime in 2016, overtime issues and increasing population and tourist activity in the area all require more officers to deal with.
But the APD’s leadership under Hooper has been a source of controversy in its own right, with major issues with use of force and racial disparities in traffic stops. An array of civil rights, homelessness and left-wing advocacy groups started pushing back against Hooper’s plan early, dubbing themselves the “$1 million for the people” campaign. They claimed that the move would only increase harassment of the city’s marginalized communities and that the $1 million should instead go to fund housing and social services.
The controversy doesn’t stop there. Hooper skipped the usual budget input process, not showing up at committee meetings to detail her proposal (or where she might face critics) and relying on some statistics that were either dubious or lacked essential context. That’s fueled further criticism of the move, with open government advocates and even some centrist Council candidates also calling for the proposal to at least be delayed for a year until it can go through a more transparent process. Right now, support for the expansion on Council only has a one-vote margin and the issue was front-and-center at the first candidate forum of this election year.
Opponents of the hike are holding a march starting at 3 p.m. today at the Federal Building, and will no doubt show up in force for tonight’s public hearing.
Property taxes — One of the other main pressures this budget year is where to set the property tax rate. Property values were just re-assessed this year and they skyrocketed in Asheville — 30 to 40 percent in many places. Property taxes are the city’s largest source of revenue and — under N.C. law — one of the only ones it has control over without having to go to the state legislature.
Currently the rate is 47.9 cents per $100 of property value. If that stayed the same, it would stick Ashevillians with a massive tax increase given the rising values. So after such a re-assessment local governments almost never keep the rate the same. Instead they usually lower it to “revenue neutral,” a rate that will mean most tax bills stay relatively the same and the city brings in about the same revenue as the year before plus any properties whose value has gone up due to new construction. This year, the “revenue neutral” rate would be 39.5 cents.
If the city lowers the rate to somewhere in between the current and revenue neutral, it can bring in significantly more revenue but would also stick Ashevillians with a higher tax bill than the year before. As local voters passed a $74 million bond referendum last year, at least 3.5 cents of the city’s property tax values have to go to repaying those bonds.
In addition, the city’s facing serious issues with its transit system (we’ve got more on that budget debate here), and may see some state and federal bus system funds cut. So Council members have agreed to put a half cents of property tax revenue towards that as well. But — combined with the fact Buncombe County will also likely increase its tax bill — that’s left officials wary of local property owners seeing a relatively high hike, which might particularly squeeze those on limited or fixed incomes.
Each cent of property tax brings in about $1.3 million, so the matter of where to set the property tax rate while also paying for things like the policing increase (if Council ends up supporting it), transit, energy efficiency programs or a major staff pay hike. Expect a lot of debate over where to set the tax rate.
The (un-discussed) staff pay hike — A major item that’s received almost no discussion is $2.5 million for a staff pay hike. This includes an across-the-board pay increase of 2.5 percent, increases in benefit payments and a fund for the city manager to hand out increases to senior or upper-middle staff based on “merit” or their salaries not being competitive. I’d like to give you a more detailed breakdown of where that cash is going, but the Blade hasn’t received one, despite repeated requests to city HR staff since May 9.
While allocating at least $1.75 million to higher pay for city staff received some attention in the city’s very first budget worksession, it’s gone entirely unmentioned since (members of Council’s Finance Committee say this because such increases are part of the city’s standard budgeting practice now). The $2.5 million wasn’t even part of the official May 9 budget presentation.
However, some of the reasons for the increase are detailed in the official budget, and they’re pretty important. Turns out the city of Asheville has some major turnover problems:
The City initiative to right-size staff continues. High turnover has placed increasing burdens on staff. Turnover in some professional positions has reached 30%, and ongoing turnover in the Police Department continues to drive high overtime costs and employee burnout, in turn driving turnover and creating an unhealthy cycle. The Human Resources Department is working with departments facing turnover challenges to review positions and evaluate total compensation against benchmarks. Included in the base budget is a merit/step increase of 2.5% for all employees who meet or exceed performance expectations. This increase will be implemented during the pay period beginning on July, 1, 2017. An additional funding pool has been allocated to address the turnover issues and to provide for a cost of labor adjustment in February, 2018. This pool will allow the City to adjust the compensation plan salary range minimums and maximums, based on 2017 cost of labor indices.
After some further inquiries, it turns out the Finance Department had 30 percent turnover last year and, HR Director Peggy Rowe noted in an email to the Blade, “other departments have experienced similar numbers in prior years.” I asked which departments those were, but so far I have not received a response. As we obtain more information about this incredibly important part of the city budget, we’ll share it.
That’s just the start, of course, but the three issues above are part of what’s making this budget year so important, controversial and complicated. Expect that to continue when Council meets tonight, 5 p.m. on the second floor of City Hall to officially hear the public’s views.