The Anaheim City Council last week approved a budget that shows substantial growth in revenue and additional services for residents, including the hiring of new police officers and firefighters, after-school programs and long overdue repairs to sidewalks and streets.
However, Mayor Tom Tait says the city’s long-term financial outlook remains plagued by a structural weakness – namely skyrocketing personnel costs –exacerbated by tax subsidies for luxury hoteliers.
The fiscal year 2015-16 general fund budget consists of $286.2 million in revenue, which is an 8 percent increase over the previous year. The city’s major revenue sources – sales, property and hotel room taxes – all show significant projected growth.
That increase is expected to mean a $10.4 million surplus over the $275.6 million in scheduled expenditures. Council members allocated $200,000 of the surplus toward the city’s reserves and steered the rest toward new services and one-time projects.
Much of the surplus spending plan – $4.5 million -- will go toward public safety. The city is planning to hire 10 new police officers this next fiscal year and is in the second year of a four-year plan to hire 48 new officers.
Also included in the additional public safety spending is the hiring of three new firefighters and funding for a new-hire fire training academy.
The public works and community services surplus spending includes: repairs to sidewalks and streets; illuminated street signs; daily after-school programs at 10 parks; the expansion of a neighborhood mobile after-school program from once a week to twice a week; the installation of air conditioning and heating at the Peralta Park recreational building; and the repair of damaged drainage at Olive Hills park.
Council members and the city’s finance director praised the budget, saying it shows that residents are the city’s “highest priority.”
“The investments and the financial outlook for the city is just extraordinary,” said Councilwoman Kris Murray.
Said Councilwoman Lucille Kring: “It’s going to something for everybody in every single part of the city.”
Tait, meanwhile, supported the budget but did not hesitate to point out inherent structural weaknesses in the city's finances.
Tait noted that the majority of the increased revenue, some 5 percent, is going toward growing public employee contract obligations. That means the city’s revenue must grow at least 5 percent just to “keep level.”
With that consideration in mind, Tait said it wasn’t sound fiscal policy to have approved on the same night a policy to award tax subsidies to luxury hotel developers. Under that policy, any developer of a four-diamond hotel would receive 70 percent of the hotel’s generated room-tax revenue for 20 years.
Tait argues that if the city’s growth isn’t substantial in future years and at the same time steers tax revenue back to hotels, it could spell trouble for the city’s financial picture.
“I’m concerned about the long-term health of the city,” Tait said.