When most large businesses do financial planning, it’s customary to include a capital improvements budget separate from the operational budget.
The city of Tupelo is equivalent in many ways to a large business, and it makes sense for the city to separate essential daily services and long-term improvements into different budgeting categories for purposes of planning and prioritizing.
That’s what an administration proposal now before the City Council would do. In addition to a balanced budget of $34 million for operational expenses, there would also be a five-year, $31 million capital improvements plan in place.
The operations budget would continue to be funded primarily by sales and property tax receipts and would pay salaries and other basic expenses involved in the delivery of city services. Low interest rate bonds would finance the capital budget.
In the proposed capital budget are big ticket items previously authorized by the council, including a $12 million aquatics center. But also included are building improvements, vehicle and equipment purchases, street overlaying and other expenditures beyond the operational basics.
Included, too, is $600,000 annually for neighborhood infrastructure and property improvements. That would include funds to demolish blighted properties, purchase property for potential development and otherwise revitalize deteriorating neighborhoods.
This is a necessary function for the city if the decline of some of its older neighborhoods is to be reversed. Such a reversal is essential to address a problem the 2010 census underscored, that Tupelo is losing a significant portion of its middle-class population to outlying areas.
While progress on the Tupelo Neighborhood Reinvestment Plan proposed earlier this year has stalled, including some components of it in the city budget is an appropriate strategy. In addition to the capital budget’s neighborhood improvements allocation, the operational budget includes a pool of money – $500,000 – for university tuition assistance for established Tupelo residents.
This reintroduction of some of the plan’s elements answers many of the concerns of its critics, including allowing them to be considered separately rather than as a package.
The tuition plan limits payments to students in their junior and senior years at a state university, ensuring that they’ve been serious about their education. By setting a ceiling on the pool, the assistance would not be a budget-buster if a large number of students applied; the amount for each student would simply be reduced. Yet it still offers an incentive for families to move into Tupelo and to stay in the city.
The neighborhood improvement budget, similarly, would be a fixed amount in the capital plan and would allow the city to take advantage of opportunities for neighborhood transformation. It does not include money for two other components of the original neighborhood plan – loans to assist with home purchases and grants for remodeling older homes.
Just as the county and state have a legitimate role in purchasing property and improving streets, drainage and other infrastructure to assist private interests in economic development projects, the city can serve as a catalyst in assisting private developers in making neighborhood redevelopment financially feasible.
Public funds spent on well-targeted neighborhood improvements would be money well-invested, ultimately benefiting all taxpayers by making the city a more attractive place to live and expanding the tax base.
These are rational, reasonable, well-considered proposals. They make good sense, and they deserve the council’s serious consideration.
NEMS Daily Journal