Durham budget shortfall: 'Something's got to give'

jwise@newsobserver.comFebruary 10, 2012 

City administrators and council members came away from a Friday meeting on next year's budget with some good news and a good many questions.

The good news was that the city appears poised to finish the current fiscal year on budget, with no need for the sort of last-minute cost-cutting there has been in recent years past.

Most of the questions pertained to dealing with a 2012-13 budget shortfall projected at $2.6 million, and how to fund the "dedicated revenue stream" for low-cost housing that Mayor Bill Bell called for in his State of the City address last Monday.

"Something's going to give," said City Manager Tom Bonfield. "We haven't determined (what) yet." Durham's current budget is $362.5 million.

Budget Director Bertha Johnson said city department heads have been told to cut their next year's budget requests by 3 percent from 2011-12 appropriations. She also said the 2012-13 shortfall would be reduced if there turns out to be money left over from the current fiscal year.

Other "challenges" remain, though. Johnson said the projection is based on the current property-tax rate and assumes no new programs or services, including no public-transit improvements, and no funding to make up for cuts in federal-grant money that has come to the city in the past.

Federal cuts directly affect the city's housing programs such as the Rolling Hills/Southside revitalization and funding for nonprofits that build and rehabilitate dwellings.

The city government is discussing collaboration with the independent Durham Housing Authority, but Community Development Director Reginald Johnson said DHA is facing federal cuts as well.

"They're in some tough spots," he said.

Councilman Eugene Brown said the city has in the past talked of adding a penny to the tax rate specifically for housing. One penny, though, would produce only about $2 million a year, he said.

"One penny isn't going to go far," said Brown.

Mayor Pro Tem Cora Cole-McFadden said she was "not ready yet to talk about a tax increase.

"Maybe a reordering of priorities," she said.

Before talking about the source of a dedicated stream, several council members said they want to know just what the city is already doing for low-cost housing, what it has committed itself to do, where money is already going and where the money is coming from.

"We've really got to be able to explain it to people," said Councilman Steve Schewel.

They were echoing resident Lanier Blum, a board member of the nonprofit Community Land Trustees, who asked for a clear breakdown of "the city's housing projects that are now in progress.

"Right now, our plans are inscrutable," Blum said.

Johnson and Bonfield assured the council members that they would have an accounting before their next budget meeting, March 2.

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