Deficit can be dealt with
The $2 million deficit in Ashland’s city budget is no trivial matter, but it’s not the end of the world. City leaders should be able to make up the shortfall without too much pain.
The city does need to get a handle on its spending. Financial Director Mark Welch says the budget has been operating with a deficit of about $1.8 million every year for the past three to four years. Citizens’ Budget Committee member Shaun Moran says the budget is not sustainable, and Ashland needs to learn to live within its means. He’s right.
The next two-year budget is showing a deficit of about $2 million. Welch said he hopes to present a plan for eliminating the deficit on April 17. We have a suggestion:
Salaries and Public Employee Retirement System payments account for about 70 percent of the general fund. Salary increases are estimated at 2.5 percent, totaling about $9 million, for 2019-2020. An additional 2 percent raise is expected in the following two-year period.
PERS costs can’t be trimmed; the city is stuck with absorbing a 25 percent increase. But employee raises could be scaled back to make up at least part of the $2 million shortfall. If raises are required under collective bargaining agreements, the council should look to exempt employees such as managers to trim a few dollars.
It’s nice to give employees salary increases, but sometimes those raises must be limited to reflect the reality of the city’s financial condition. Private businesses do that; cities can, too.