EVERETT — A brief comment in the number-crunching at a 2004 city budget workshop Wednesday illustrated how the budget has become a key issue in the November mayoral race.
City budget director Travis Earl presented a preliminary budget that is balanced and includes no layoffs or cuts in programs, and no tax increases.
"This flies in the face of allegations" about ballooning budget gaps, City Council President Arlan Hatloe said.
"We are in pretty good shape, much more than other cities around us," he said.
Hatloe later clarified that the allegations he was referring to were charges that former City Councilman Ray Stephanson has made in his campaign against Mayor Frank Anderson.
"All of this stuff is not true," Hatloe said after the meeting. "It amazes me this is coming from people with no working knowledge of what those numbers mean."
The numbers that Stephanson and Hatloe are referring to are the same. But where Hatloe sees fiscal responsibility, Stephanson sees looming problems.
The preliminary 2004 budget isn’t the only issue. The "strategic outlook" for budgets from 2005 to 2008 show a growing gap between revenues and expenses.
Earl said those projections are worst-case scenarios and show only what would happen if the City Council does not take action.
"It’s a tool I use to see what steps need to be taken to prevent these scenarios from happening," he said. "But no one would let that happen."
Stephanson has repeatedly brought up those projections in his campaign, saying that the Anderson administration should consider more budget cuts now to prevent more drastic cuts — and possibly tax increases — in the future. State law requires the city to submit a balanced budget.
"I wouldn’t necessarily say these are worst-case scenarios," Stephanson said Wednesday. "If we don’t have the economic recovery we all hope for, we could see cuts in critical services."
Hatloe said the administration of Mayor Ed Hansen — for which Stephanson worked as executive director from 1996 to 1998 — used the same approach to long-term budget forecasting.
Stephanson said Hansen went further than Anderson in "stretching departments to be as cost-effective as they can be."
He pointed to the 7.9 percent increase between 2003 and 2004 in the city’s general fund, which pays for police, fire, parks and other services.
Earl said most of that money will be taken from the city’s annual budget surplus and will help fund pensions of police and fire personnel until 2050.
City officials had initially hoped to contribute enough money to fully fund the pension funds by 2009, but increased health insurance costs have increased pension expenses, so the city now plans to pay into it until 2020. Earl said the target date could be moved up again, but it’s best not to set aside millions of dollars more for the pension fund now, when the city’s budget is so tight.
Stephanson said the move is another illustration that the city is putting off tough decisions.
"We’re passing on this financial responsibility to our kids and grandkids," he said.
Reporter David Olson:
425-339-3452 or dolson@heraldnet.com.
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