Halfway through Tampa’s budget year, Mayor Bob Buckhorn is already looking ahead to next year’s budget, which could come up $20 million short.
Buckhorn revealed the looming deficit during last week’s “State of the City” address and said he hoped to close the gap as he did last year -- without tax increases or job cuts.
“We’ve got some tough decisions ahead,” Buckhorn told a crowd gathered in the historic Kress building. “There is no low-hanging fruit.”
The projected deficit could go up or down over the next six months, so the number remains tentative, said budget director Dennis Rogero.
On Thursday, Buckhorn’s finance director, Sonya Little, told City Council members the city has $108 million in budget reserves.
Buckhorn drew on those reserves – inherited from former Mayor Pam Iorio – to help close a $34 million deficit in 2011 and a $27 million deficit last year.
The mayor said Thursday the reserves remain an option for softening next year’s potential budgetary blow caused by recession-depressed property taxes.
The reserves now sit equal to about 27 percent of this year’s $347.2 million operating budget. Bond markets – the source of any borrowing the city might do for 2014 – require a reserve of 20 percent.
“We have a cushion there,” Buckhorn said. “That is an option, but it would not be my preferred option.”
Aside from dipping into reserves, Buckhorn balanced his past two budgets by eliminating unfilled jobs, refinancing some debt and borrowing to finance a joint computer system overhaul with Hillsborough County.
The next budget gap will be closed by nibbling at the edges rather than taking large bites, he said.
“There’s not going to be a $6 (million) or $7 million whack,” he said. “It’s about finding efficiencies out there and grabbing them.”
This year’s budget streamlined the city agency that oversees growth and economic development in hopes of luring new investment and construction.
That, Buckhorn said, will be the city’s best bet for escaping the economic doldrums. The state’s Save Our Homes law, which caps tax hikes on residential property, will keep taxes on a majority of the city’s real estate extremely low for years to come.
For that reason, Buckhorn has been pushing for more commercial construction, which is exempt from the cap. He has counted about $500 million in new construction on the horizon. That includes a boutique hotel in downtown’s mothballed federal courthouse and a riverfront apartment tower planned for city property near the Straz Center for the Performing Arts.
But those projects won’t start appearing on city tax rolls until at least 2015, he said.
In the meantime, Buckhorn will have a better sense of his finances as of Oct. 1 when the county Property Appraiser’s Office finishes its countywide tally of property values. Those values have dropped every year since the 2008 housing market crash, but the decline has been less severe each year since then.
Buckhorn hopes this will be the year values show actual growth.
“We’re still in a recession, but it’s getting better,” he said.
Whatever its final shape, the city budget must win the approval of City Council.
Councilwoman Yvonne Yolie Capin suggested on Thursday that the council hire its own budget analyst to help the seven members understand the details of the 2014 budget.
Previous analysts have come from the city’s finance department. Councilwoman Mary Mulhern suggested the council would benefit from a more independent view of the budget.
During her first term on the council, Mulhern created a citizens committee to advise the council when her fellow council members balked at hiring an analyst, she said. That citizens committee has met routinely since the current city budget was passed last summer.
Council members will discuss Capin’s proposal at their May 23 workshop meeting.
Councilman Harry Cohen, who leads the council’s finance committee, suggested the council ponder the need for a paid analyst.
“I know I myself would like to have some time to think about it,” he said.