NEW BUDGET PROPOSAL: From City Manager Bruce Moore Brian Chilson
Brian Chilson
NEW BUDGET PROPOSAL: From City Manager Bruce Moore

A new budget recommendation was filed Friday for consideration by the Little Rock Board of Directors Tuesday that would reduce operating expenses by $2.1 million, a sharply reduced amount compared with a $5.3 million cut in the smaller of two proposals presented Tuesday by Mayor Frank Scott Jr.

The proposal comes from city administration but it presumably reflects discussions City Manager Bruce Moore has been having with the mayor and individual board members. The budget proposal says it was approved by Moore. He had insisted to me Friday he was not sampling board members for up or down votes on budget elements.

Key features include some changes in cuts that had been proposed for outside agencies:

  • The  $300,000 budgeted annually to subsidize the operating costs of the private Little Rock Regional Chamber of Commerce, would be reduced by $50,000, not the $150,000 originally proposed.
  • Where a $115,000 reduction had been proposed in the $230,000 allotted to the city’s Museum of Discovery, the reduction would be only $19,000.
  • First Tee, a private nonprofit golf course established by the billionaire Stephens that has turned into a growing drain on city finances, would take a $160,000 reduction.
  • The Downtown Partnership would take a $25,000 reduction.
  • Rock Region Metro would still lose $500,000. That money will be transferred to the street fund. CORRECTION: The bus company funding will be preserved by transfer FROM the street fund. That helps the general budget but reduces street spending.

CLARIFICATION: The cuts in these cases all were based on initially on annualized figures. The cuts I’ve written about today are actual cuts for the last six months of the budget year, and the cuts in the new proposal reflect actual impact for the last six months of the year. Thus, where the Chamber had been budgeted for $300,000, the $150,000 annual cut would have meant only a $75,000 for the second half of the year. The new proposal means they’ll actually lose $25,000, or a half-year’s worth of the new annualized amount. Similarly, the Museum of Discovery’s $19,000 cut is down from the $57,500 they were proposed to lose iinitially — half-year’s worth of a $115,000 cut. And so on down the line.

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The budget still anticipates the closure of two golf courses, but they are not identified. Employees were told last week that War Memorial and Hindman would be closed. Some discussion about that seems likely among board members who have different ideas about golf course priorities. The board perhaps will discuss why decisions were apparently made and employees were notified of them before the board had voted. This sparked unhappiness in discussions Friday.

The new document indicates a $375,000 cut in spending on youth programs, where $750,000 had been proposed, and a $48,500 cut in the Cities of Service program, where $60,000 had been proposed.

The big change is in proposed cuts in city departments, a total of $1.3 million. The summary doesn’t indicate how many jobs that would entail. The smaller of the mayor’s recommended cuts earlier this week would have trimmed that spending by $2.9 million. That figure reflected the elimination of 48 jobs, 34 of them currently filled. The parks department took the biggest hit.

The new proposal predicts a $184,000 rise in revenue, with loss of golf course revenue being offset by $360,000 in expected new income thanks to a new state law requiring the collection of sales tax on Internet sales.

Scott’s presentation Tuesday said the cuts were necessary to offset what would otherwise be an expected $7 million budget deficit. The new proposal indicates the smaller cuts would produce a general fund balance of $2.29 million. I’m guessing that means that deficit spending would be avoided by drawing on reserve money, rather than increased revenue, but the summary doesn’t provide those numbers.

The new proposal makes no mention of new police officers and a body camera purchase for officers that have been identified as priorities by the mayor.

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Elements of the new proposal met resistance Tuesday from various directors, particularly the reduction in support of mass transit, which now isn’t proposed

The reductions are in a budget adopted by directors in December. They’ve come under criticism since the budget cut discussion began this week for approving an unrealistic budget. That criticism, in turn, seems likely to lead to a discussion of how the administrative staff was so far off the mark on revenue projections. It’s been a recurring problem in recent years, particularly in the failure of sales taxes to meet projections. It’s the major source of city money.

Some of the sales tax shortfall is a product of migration of retail to the internet, but Amazon began voluntarily paying sales taxes long ago and the boost from that hasn’t met expectations. The city has also lost sales taxes to the migration of retail to suburban cities where many people who work in Little Rock live and shop. The city also has had relatively static population growth, particularly compared with cities in Northwest Arkansas and Faulkner and Saline counties.

Here’s the new budget proposal filed Friday evening. It’s about a 1 percent cut in an operating budget of more than $200 million, where the smaller of Scott’s proposals had been a 2.5 percent cut.