Preparing for budget realities
The City of Modesto is taking an aggressive approach in dealing with its budget, as the realities of overspending, lengthy interim positions, the pension crisis and a general lack of fiscal discipline have come home to roost.
“The color of money”
As mayor I would hear references to the “color of money” when discussing budgets and spending. For example – although the approved budget is $383.5 million, much of that is tied up and not discretionary. That’s why some much attention is paid to the general fund which council has spending authority ($129.5 million) – except for the fact that 75% of it is committed to public safety.
Protecting the general fund
Due to the flexibility and importance of the general fund, the shell games this year to keep it solvent are varied. From reorganizing the Parks and Recreation Department, to taking funds from fleet replacement anything is game. I am amazed at how millions upon millions of taxpayer dollars are wasted in numerous scandals and “learning events” all year long, yet everyone becomes a fiscal conservative at budget time.
It’s about to get worse – CalPERS retirement obligations loom large
CalPERS (the employee retirement fund) is requiring more money to shore up their own finances are they deal with keeping up with their obligations. The City’s portion this year is $23.7 million ($17.1 from the General fund) by 2028 this commitment is going to balloon to $56.4 million – wow!
Marijuana to the rescue
Well, not quite but the new budget does include $1.5 million dollars in marijuana taxes. This is curious as federal banking laws create businesses that have to transact business in cash, making tax collecting interesting. Add to that that the last Pot dispensary has been shut down this week in Modesto and I have to wonder if that is going to be a viable funding source.