When Will They Ever Listen?  Stop the Spending, Ashland!

By David Runkel
When it comes to spending money, I’m a conservative, both with my own dollars and with those of the taxpayer who I represent as a member of the Citizens Budget Committee.  
So, in my review and assessment of the City Manager’s proposed 2023-25 budget, I’ve concluded that when the Committee has its decision making meeting next Thursday, May 25,  I’m voting NO, unless major spending cuts are approved. 
I believe the budget proposed by City Manager Joe Lessard puts Ashland on a trajectory that is not sustainable and adoption of it would have a major adverse impact on our community. 
A series of  Finance Directors over the last four or five budgets has warned about a “structural deficit” in the general fund.  We’ve escaped several years with unexpected Covid aid grants from the federal government and this year by not filling dozens of city jobs. 
This 2023-25 general fund budget proposal, however, has a $7.1 million gap between revenues and expenditures with anticipated revenues of  $84.8 million with budgeted expenditures of $91.5 million.  This is up $400,000 from Lessard’s original proposal after an error was found by city finance officials.  Lessard would cover $6.2 million of the gap with carryover funds from this year, largely savings from unfilled city positions, with the rest coming by reducing the city’s overall savings plan, called the ending fund balance.
Never has any previous finance director asked the Budget Committee to approve a spending plan where  expenditures so far exceed revenues. 
What happens in the future?  The city is filling vacant positions, while the new budget includes hiring six additional Fire and Rescue staffers, two additional police officers and  several more administrative personnel.
These additional city workers come at a time when our population is stable, the local economy is hurt by the 40 percent reduction in Oregon Shakespeare Festival performances and an economic recession is looming nationally.
Moreover some of the revenue projections in the 2023-25 budget are problematic and exceedingly optimistic. 
-Is investment income going to grow $1.3 million?
– Is the Council prepared to increase franchise fees by $2 million?  These fees are passed on to telephone, natural gas, internet and other utility customers.
– Is an unproven ambulance service expansion going to bring in an additional $2.3 million? This will also be paid by city residents as well as those in rural areas served by Ashland Fire and Rescue.
– Are lodging taxes going up $1.3 million at a time when our tourism industry is collapsing?  I know something about this field, having run a bed and breakfast inn for 18 years and having talked recently with some of my former colleagues who are worried about empty rooms.
– Are greens fees at the golf course going to substantially increase?
As for the spending proposal before the Citizens Budget Committee, It seems logical that instead of spending all our income and much of our savings, the city needs to begin conserving now.  Some cuts in spending today would be far better than massive cuts in the future, or alternatively increasing property taxes through creation of a special taxing district for parks or fire and rescue.
A special district with its own taxing authority could lead to a 50 percent increase in property taxes, making Ashland even more unaffordable to many low and moderate income residents.
In recent years, our demographic changes have been dramatic, with a huge growth in the percentage of older retired folks, nearly all white.   And, even today, it’s been reported that half of our residents pay out 50 percent of their monthly income for housing.  A property tax increase will hit these people even harder.
Ashland’s budgetary gap is not going to go away but instead is likely to grow substantially unless steps are taken this year. 
This analysis does not include the fiscal impact of the proposed $100 million in new spending on construction projects, including a $10 million swimming pool and a $65 million water treatment plant.  Borrowing for these projects will lead to increased pressure on the city’s budget and to the bills of utility customers over the next 20 or more years.   In conclusion:
I support retaining most of our savings to meet future needs.
I support a budget where spending equals income.
I support realistic projections of tax and fee revenue.
I support a diverse community with people from all income strata, all ages and all ethnic and racial backgrounds.
This pending budget proposal does none of these things.  I will support amendments to the budget that will reduce expenditures. 

David Runkel has been a Citizens Budget Committee member for more than a dozen years and served as its Chair for at least six of those years.