Them’s some fancy words from our chief finance bull thrower (FF 52:00)
So what is a structural deficit?
the amount by which a government’s spending is more than it receives in taxes in a particular period, whether the economy is performing well or not
Mr. Pritchett made this wild claim at the city council meeting last night, and six of the councilors agreed with him.
It is total nonsense.
As one citizen pointed out the way to not produce municipal debt is to budget better, in other words do the job we elected you to do. He also pointed out that this $2 million dollar increase is less than 1% of the total budget and can easily be made up.
The problem is for decades the city has implemented the piling on approach to building the yearly budget instead of doing zero based budgeting each year. This has caused bloated department budgets.
As for property taxes, valuations in Sioux Falls have skyrocketed over the past 3 years driving property taxes up with or without government intervention.
Even if the economy was doing great right now, this natural FREE market increase makes up for any inflationary increases we may need.
We also have given millions away in TIFs.
It cracks me up that the city council would nickel and dime $50K for the Siouxland Heritage endowment fund and $68K for an arts coordinator, but doesn’t blink an eye approving $50 million in TIFs for parking ramps attached to luxury condos.
That’s our council doing the important work, making sure developers, banksters and bondsters are happy and well fed.
I’m starting to think the only structural deficit the city has exists between the ears of our councilors.
Why wasn’t the last mayoral race about this and property evaluation going up? Instead, we heard about zombies, food deserts, and a mentoring program.
Not get me wrong, food deserts and mentoring are things that need to be addressed, but if you want to win an election you need to talk about issues that directly impact those who actually vote.
I thought more about this after last night, and I was against raising the property tax revenues. But, if you think about it, whether we take the increase or not, neither helps the “citizens” residing in the city. Remember, “WE” all pay on average 1.47% of the land value each year, whether the city takes $70 million or 78,000,000 million.
IF we do not take the money, the money sits in the County Treasury for one year, it then goes back to the State Treasury where the legislators have the ability to reapportion the revenue in future years.
If we do not take the money this year, each year thereafter, as inflation goes up 1.5% to 3.0%, the Finance Director is correct, ‘we’ are always behind the eightball.
However, ‘we’ can lower our “expenses” each year also, especially since more than half of our ‘revenues’ come from Federal and State Grants, TIFS, Loans, Bonds, etc.
I now understand it as this, it is a matter of principle, ‘take’ the revenues, place it in the City Treasury, the COUNCIL could however, adopt a RESOLUTION to NOT spend $5,000,000 of those dollars this year, placing it in reserves for future years, or they could take the $2,200,000 million this year, and create a “PROGRAM” to give back to the Low Income Residents (Seniors and Disabled Persons) helping by giving them their money back for Food, Clothes, Utilities, Rent, etc.
IF, if we really wanted to help people by lowering their “property taxes” in Sioux Falls, then I would recommend this City Council to LOBBY the legislature come January 2023 to March 2023 to do the following:
1) Cut the Property Tax Rate on “Residential Land Values” effectively cutting their rate, to, more progressively, make it a 0% Property Tax Rate on any Resident who has paid property taxes for 30 years or more, or who is 50 years old or older; and
2) Adopt State Law to reform and restructure the process of how Counties “evaluate” land assessments, thus controlling the maximum ‘assessments’ which can be assessed to the land itself.
**The CITY, and its ‘residents’ are entitled to the maximum amount of property tax revenues of which have been paid by all “Land Owners, Property Holders, Residents” of the City, and the Finance Director is obligated to request and ensure that “WE” maximize all potential state and local tax dollars, that is his job.
– Mike Zitterich
“Not get me wrong”?…. That sounds like my old German born grandmother.
Good job, Mike! Adding those asterisks really helps drive the random fully capitalized words and quotation marks home. Maybe try adding an umlaut or two next?
So a temporary period of negative cash flow.
With the reserves held by the City, is this really a problem?
Budgets are built on an annual basis.
It’s not fun being an elected official if you have no taxpayer money to spend.
The problem is NOT the issue whether ‘we’ take the revenue or not – the FINANCE DIRECTOR is literally tasked with providing his legal assessment of all “maximum revenues” the residents can take, providing his opinion of what, why, and when, and in providing his recommendation. The CITY COUNCIL then has to make the decision – the Council must decide to take the funds or not, while determining what to do with the funds, they could accept them, while placing them 100% in reserves, or to spend 50% of them, while reserving 50% for tomorrow.
It is a matter where do the “residents” wish to keep their “allottment” of Property Taxes paid by the landowners/property holders of Sioux Falls?
Do you trust the County to hold the funds, or do you trust the State Treasury to hold the funds?
At least by taking them, ‘we’ hold them in the City Treasury.
Fact is – if you want to help people, you vote in Pierre to “adjust” the Rate of the Tax…
The city should NEVER have more then $20 million in reserves at any time. They should also do zero based budgeting each year and a balanced budget. The city and state should NEVER have a savings account. I can manage that on my own.
We can reserve put tax dollars for specific uses in future years, that us what we been doing in the enterprise funds mainly….nothing wrong with that. That’s how they mostly funded maintenance and upgrades to water and water Reclamation.