FY2012 Budget: What You Need To Know

This budget makes difficult but necessary decisions to significantly cut spending and increase revenue.

Budget Cuts:

• This year's budget reflects more than $60M in cuts as compared to current spending
• Mayor Taveras has cut his own pay 10% and the Mayor's office budget by 13%.
  
• Laid off 10% of non-union City workforce
  
• Cut 10% from the budgets of the police and fire departments
  
• Closed six schools, cut $16M in wages and benefits, and laid off administrative staff to close
  
• $28M school department deficit
  
• Major cuts, an average of 10%, across every City department, affecting many vital city services
  
• Revised labor contract with 1033 that saves $26M through pay cuts and increased healthcare contributions
  
• Revised labor contract with teachers that results in a net savings to the City of $53 million including a freeze on raises, a reduction in sick days and increased healthcare co-shares.
  
• Revised labor contract with firefighters that saves $27M through pay freezes, increased healthcare co-shares and reductions in minimum manning
  
• Revised labor contract with police officers that achieved $6M in savings in FY12 and eliminated pay raises for six years.

• Overnight resident parking program that will generate ~$900,000 annually
• City won support from the General Assembly to amend its retiree health care benefits system, which will save the City up to $11.6M, and to implement a fee on master alarm fire boxes for business owners generating $1M in revenue and to implement a fee on water ratepayers for the use of fire hydrants generating $2M in revenue.
• $300,000 more parking meter revenue, with hourly parking rate increase to $1.25 per hour
  from $1 per hour.
• $2 million through increased parking enforcement.
• Increased fees for dumpsters and a new $20 fee for disposal of mattresses.
• $7.1M in additional contributions from the City's tax-exempt hospitals and universities
  NOTE: If tax exempts paid full tax value on their property, the amount paid to the City would be $97.5M. Because the City has yet to reach agreement on increasing payments, the City is supporting legislation at the State House requiring tax-exempt institutions to pay 25% of what their real estate taxes would be if they were not a non-profit corporation.

• After laying off city workers, instituting pay cuts, reducing the police and fire budgets, increasing contributions from universities and hospitals, closing schools, and reducing the school budget, the City still cannot close the massive structural deficit without a tax increase. While the car tax rate will decrease, the exemption of the car tax will drop from $6,000 to $1,000 meaning that the first $1,000 is now exempt from taxation.
  
• The state has authorized that residential property taxes will increase beyond the statutory minimum to 4.9% and commercial property taxes also increase.
  
• Property tax owners with houses worth more than $1M will pay more as the value of their homestead exemption is reduced after the first $1M in value.

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