EDITORIAL: No layoffs, no new taxes

Months of work among Tupelo’s elected leaders and administrative department leaders culminated last week in an unofficial agreement on a 2011 budget – $32.7 million – reflecting the give and take of good faith negotiations, including disagreements during the process that did not overwhelm the collegial atmosphere so far marking most of the 2009-2013 term.
A vote this week is expected for formal adoption of the budget before the Sept. 15 statutory deadline in Mississippi law.
The budget negotiations were open to public hearing and viewing, the right action and the right spirit in the best interests of all Tupeloans, especially the taxpayers.
Mayor Jack Reed Jr. said last week in a statement made when he presented the executive budget for the City Council’s eventual action, “As I said last year when Council President Fred Pitts and I agreed to open the process up to the public and to the press, this has been candid decisions which have helped get us to this point. I have looked at it as a conversation, not a confrontation, and that has largely been the case.”
Tupelo, despite feeling the effects of a recession economy in some revenue streams, has been fortunate in working through a 2011 budget without layoffs and without a property tax increase. City employees, like thousands of private-sector employees in many jobs, will not receive a raise until the financial times have improved.
The mayor’s statement that “our city is in strong financial shape” is no idle boast.
Good stewardship, to use an old-fashioned word, has maintained strong financial integrity for the city across decades of conservative budgeting and careful accumulation of cash reserves for emergencies and, in a more limited way, for the lean times.
Chief Financial Officer Lynn Norris, who returned to Tupelo City Hall after several years as a private-sector financial adviser and consultant, said Tupelo’s long-term policies have given it an enviable position, especially in the eyes of investment bankers and bond brokers who are responsible for a AA3 rating, one notch blow the state’s AA2 standing in the bond markets.
Norris said the general capital reserve fund has about $20 million in interest-bearing accounts; the reserve funds’ total, including departmentally restricted accounts, is about $70 million.
“No other city (in Mississippi) is stronger than we are,” Norris said in an interview with the Daily Journal.
Norris said Tupelo’s bond sales remain attractive to national investment bankers, local banks and some individuals who want to invest specifically in Tupelo or other Mississippi bonds.
Reed, in his budget message, said, “While it relies on some use of our rainy-day funds, it cuts that amount in half over last year’s reliance on our reserve, and still leaves us with significantly more surplus than is required to uphold our excellent bond rating.”
The level-headed negotiations led to agreement on one important and potentially contentious item. The budget includes $75,000 “to potentially be utilized to move forward with some measured response to the need expressed by many of our citizens for some help with transportation,” as Reed described.
It is an appropriate beginning without making an enormous investment, but heavy use could pull the council toward broader investment in coming budget cycles.
Reed noted, “With the hiring process of Toyota Motor Company and its Tier 1 suppliers, we should reasonably expect our local unemployment figures – still currently at 12.5 percent – to go down, and our economic activity – in both sales tax receipts and ad valorem taxes – to go up. ”
An improving economy will reward Tupelo’s carefully balanced frugality in the long term.

NEMS Daily Journal

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