The City of Bloomington has just begun their budget hearings for 2013. The City’s proposed 2013 budget can be found here: 2013 Proposed Budget.
Monroe County will begin ours in mid-September. Both the City and the County will likely be running some sort of deficit, at least on paper (there are many reasons why what looks like a projected deficit does not, by the end of the year, wind up actually being a real deficit). Any time deficit spending is contemplated, the level of reserves rises to paramount importance: once the reserves are expended, obviously, deficit spending becomes impossible.
There are many ways to represent budgetary reserves, but since the City of Bloomington chose to represent their reserves in a particular way (the projected cash balance in the General Fund at the end of 2013 plus the Rainy Day Fund), I thought it would be illustrative to calculate the County’s is the same manner, by way of comparison.
Here are the results:
|2013 EOY Projected Cash Balance||$ 2,522,943.00||$ 11,283,937.92|
|Rainy Day||$ 4,637,930.00||$ 5,570,550.00|
|Total Reserves||$ 7,160,873.00||$ 16,854,487.92|
|Projected General Fund Budget||$ 34,786,808.00||$ 29,202,961.00|
|Reserves as % of Gen Fund||21%||58%|
|Projected 2013 Deficit||$ 781,157.00||$ 713,546|
|2013 Deficit as % of Reserves||10.9%||4.2%|
Of course, there are a lot of what-ifs in this analysis. My projected general fund budget includes a 2% employee COLA increase that I am proposing, while basically remaining flat in other areas — and also makes some assumptions about revenues (which I will post in a different entry). But the upshot is that even under a projected deficit scenario, Monroe County Government, through years of prudent fiscal management clearly has reserves that are very healthy, compared to the proposed level of deficit spending during these difficult economic times. This is exactly why we build up reserves during good times — so we don’t have to slash basic public services when times are tighter.