EDITORIAL: Tupelo budget

The new Tupelo administration’s first pass at a city budget for the 2010 fiscal year has the marks of prudence and restraint.
Mayor Jack Reed Jr. presented his proposed financial plan to the City Council last week, the first step in a process that will include council review and revision of the $34.7 million budget. A completed budget is due Sept. 15 for the fiscal year that begins Oct. 1.
To no one’s surprise, finances are tight. Tough economic times have produced revenue shortages, notably in sales tax collections. More than half of Tupelo’s general fund revenues come from the state’s rebate of sales tax collected in the city. The 2010 budget anticipates a nearly $500,000, or 3 percent, drop in sales tax collections. That’s roughly the same amount the city’s insurance premiums are rising.
Additionally, interest income is down as are fines and fees paid.
But the mayor’s proposal takes a scalpel, not a meat ax, to city expenditures. It would freeze employee salaries – not a welcome move, but what many private businesses have done – while viewing employee layoffs only as a last resort. No raises is a small price for city employees to pay to keep their jobs.
Some $400,000 would be saved in street overlay expenditures. A delay in asphalt overlaying for some streets is an understandable economy measure in times like these.
The belt-tightening beats a tax increase, and there’s no plan to raise taxes in the proposed budget. That wouldn’t be prudent just as signs are emerging of a national economic turnaround. People need to be able to loosen their wallets to jump-start the local economy and sales tax collections.
The budget does call for dipping into the city’s $22 million in operating reserves, which makes sense given the unusual economic circumstances.
One notable aspect of this year’s budget process is its complete transparency. In years past council subcommittees worked on the budget, and since the numbers didn’t constitute a quorum, the press and public did not have to be invited. In the new administration, the entire council is serving as a budget committee-of-the-whole.
This process change does two things: 1) It opens budget development to full public view; and 2) It ensures that every council member gets the same information at the same time, reducing the likelihood of factionalism or political tug-of-war on budget issues.
New Council President Fred Pitts initiated this change in the name of transparency, and it’s a laudable move.
The new mayor and council seem to be taking the right approach to the first major challenge of the new administration, combining careful stewardship of city tax dollars with improvements in the budgeting process.

NEMS Daily Journal