The City & the Budget Process - VISION-PLAN-BUDGET

Graphic provided by the Cushing Board Of Commissioners and Cushing Conversations

Graphic provided by the Cushing Board Of Commissioners and Cushing Conversations

Creating a city budget may seem simple, and to a degree, part of it is straight forward. It can also be vexing to say the least, when priorities are not clear and well defined, and I believe this was a point being made by some commissioners at the last "Cushing Conversations" public meeting.

The first graphic above shows what was presented as the "Core Services" the city provides to the citizens of Cushing. I think I would also include Fire and Police as essential agencies as well. These items are basic needs the community must have, in order to be organized, and a viable place to live, work and to raise a family. These are "needs", not what we "want" in order to live in a small town community in Oklahoma. These services are paid for by the citizens who live here, and those that travel into Cushing and do business and other economic transactions in our city. All of those sales tax dollars help pay for the level of service that is provided to us through the city government.  So lets just say right off the bat, the citizens of Cushing are not carrying the whole burden of the tax base. As an aside - that is another reason for a well planned and supported Economic Developer. 

However utilities and other fees related to the cost of renting or owning a home in Cushing does reside with the citizens. There was healthy discussion about why Cushing does not use ad valorem taxes to fund the city budget. And the answer, in part, was as laid out above. And the additional reason given was, that it leaves an unfettered source of income for Cushing Public Schools, to maintain and grow the local school system. and facilities. So whether you agree with that logic or not, it does seem to be a mutually beneficial unspoken agreement that both entities can live within.   There is one other factor in creating our budget that we must consider. State Law. Oklahoma law requires that we only "budget" 90% of our total revenue. I did not say spend, I said budget. That will be important later on. For some time I thought this was a savings plan, rainy day fund only, or something like that. That is incorrect. It just gives us some leeway, so as to not go over our collected revenues, and create an accidental shortfall in the budget. So why is this important. Refer to the second graphic in this story. When we create our budget, we are giving ourselves a 30% leeway in our budget. 30% each year is set aside as untouchable for departments or other priorities to use. Does our sales tax revenue move that much from year to year. Let's take a look.

Provided by Cushing Board Of Commissioners 

Let's just take the numbers given atop the blue bar graphs. At the peak in FY13/14 we took in $3,470,557.15. The following year it declined to $3,220,217.04. that is a 7.3% difference in the revenue from one year to the next, according to this provided chart. well within the 10% required by state law. 70% of that revenue number equates to $2,429,390.00. That means we left out of the budget $1,041,161.14 as unusable funds. Again Oklahoma law requires us to set aside only $347,055.72. But let me reemphasize, that does not mean that we cannot spend that money, it only means we cannot budget to spend that money. Meaning we have to wait and see if that same dollar amount is collected.

What is my point to all that numbers jargon. Basically,  that 20% of our budget is not earmarked for any specific need.  Do we save it? Sometimes yes. But remember when I said it doesn't mean you can't spend it, if the money is collected. My first question is, how is it spent? On what and why? These decisions seem to be made at the end of the year, when all totals are in. The commissioners have agreed, in the past, to pay down debt etc... I am not saying these are bad decisions, just not included in a plan that is prioritized and accountable to the public tax payer. The cynical part of me says, "Maybe this is a plan to keep expectations of city departments spending low, so that we never have to say we are cutting the budget". Or maybe this theory; "If we prioritized these things and they added up to more than $185,000 the public would have to vote on the expenditure". Not sure how that works when you are paying off debt. I don't know why that would be different than other expenditures. Isn't the point in voting on it, to see if the citizens agree with the priority of paying off debt? One more aside - Has ANYONE EVER thought about reducing taxes or utilities? That as much as anyting could spur economic development in our city. I feel it necessary to say as a conservative person myself. Just a thought. It shows you how tough that is to do, at this personal level of government. You certainly will never do it, if it is never planned.

I'm not saying I'm correct here, just asking questions. I think removing 30% of the budget, off the table, and away from being properly prioritized makes for bad planning. It may reduce debt at times, which is good. But it may also hamper us from setting out solid long term priorities for the growth and renewal of our city. The Budget is a "planning document" that should help us move forward according to those priorities and plans. Our VISION should create the PLAN, and the plan should form our BUDGET. In my opinion we are working backwards in how we approach these items. We create the BUDGET, that causes us to react with a short term PLAN, which gives us lack of VISION.