The city council in a 4-4 vote denied mayor Jose “Joey” Torres’ administration a $22.5 million temporary budget which would have funded municipal government through February on Tuesday evening.
Council members cited the Torres administration’s lack of austerity in handling the city’s budget to vote down the temporary appropriations measure which required six votes for passage.
“By passing these appropriations we always back ourselves into a corner because you’ve already spent eighty percent of the budget so nothing can be done,” said Julio Tavarez, 5th Ward councilman.
Tavarez said the city ends up spending majority of its dollars prior to the adoption of a finalized budget which prevents the council from cutting expenditures. He cited the back to back double digit tax increases under former mayor Jeffery Jones.
“This feels like the film ‘Groundhog Day.’ The same scenario always plays out at different points in time,” said Andre Sayegh, 6th Ward councilman. He urged the administration to switch from fiscal to calendar year accounting, which he says, will avoid temporary budgets to fund government.
In fact, the same scenario did play out in late November. The council voted down a temporary spending measure, but later two members reversed their votes allowing for its passage.
The city has been operating through temporary budgets since the start of the 2016 fiscal year on July 1st, 2016. The city spent $150.95 million through temporary measures from July through January. The administration’s latest request will push spending to $173.48 million with four months still remaining before the fiscal year concludes.
“The majority of this is for payroll,” said Nellie Pou, business administrator.
At this pace the city’s spending will hit $260.22 million exceeding last year’s budget of $252.61 million. The Torres administration introduced a $283.22 million fiscal year 2016 budget. The administration repeatedly told council members there will be drastic spending cuts before a final budget is presented for a vote.
Pou said the administration plans to present a final budget within this month to the council. She said the city is waiting on its transitional aid number. Last year, the city received $25 million in state aid. This year, the Torres administration sought $38.4 million.
Council members Ruby Cotton, Maritza Davila, Michael Jackson, and Mohammed Akhtaruzzaman voted in favor of the temporary measure while Tavarez, Sayegh, Kenneth Morris, and Alex Mendez voted against.
William McKoy, 3rd Ward councilman, was not present.
“We have to make payroll. We have to pay bills,” reasoned Cotton before casting her vote in support of the measure.
“You are fully aware what the impact is going to be,” said Pou recognizing the measure failed to secure the six needed votes. “I’m not going to try to make you understand or dispute the issues back and forth.”
The business administrator said the city will not be able to pay its bills without the temporary spending measure.
Council members also took up two other significant finance measures. The council passed a measure to send out estimated tax bills for the first quarter of 2016 or third quarter of fiscal year 2016.
The city is looking to collect 105-percent of last year’s tax levy which will result in higher taxes for property owners.
The Torres administration downplayed the tax increases by stating most taxpayers will see a reduction. However, Morris pointed out the reduction is more a result of the end of year shock taxpayers experienced due to the retroactive billing following the tax property revaluation.
“Not every taxpayer will see a decrease,” said Morris. He has previously said those property owners whose assessments went up could be hit hard by the new tax increases.
The council also approved a grace period for the third quarter tax bills due to delayed mailing. The tax bills will go out on February 26th, 2016. Homeowners will have until March 22nd, 2016 to pay their tax bills.