Mitchell: School and police costs driving city’s budget higher

NEW BEDFORD — Mayor Jon Mitchell presented his spending proposal for the next budget year to the City Council on Wednesday night, launching weeks of wrangling over what he said is actually a small, and “shrinking slice of the pie.” 

Mitchell stood at a podium in council chambers next to a chart showing the overall pie of proposed general fund appropriations of nearly $479 million, a third to be raised by property taxes. The general fund allocation is up 6% from the current budget — driven largely by increases in spending for schools and the Police Department.   

The action from now through June, though — hearings, speeches and modest budget cutting — only deals with less than 25% of the whole. 

That’s “government” and “public safety,” which each make up a bit more than 12% of general fund allocations. 

“As the chart illustrates, the municipal services that residents count on every day — from public safety, to trash collection, to road and park maintenance, to water and wastewater services — together make up less than a quarter of the city’s budget,” Mitchell said in remarks that ran about 15 minutes. 

That slice diminishes with the expansion of spending on things over which the mayor and council have little to no control: school spending, which is 60% of the whole, and non-discretionary costs — pensions, health and life insurance, debt service — at 15%. 

Read the proposed 2025 budget ⇢

The biggest portion, education, Mitchell said, “is the bare minimum we can budget under state law. The city cannot cut it without running afoul of state foundational budget requirements.”

As state education aid rises, so must local school spending, Mitchell said.  The total proposed education allocation of $230 million is up nearly 4% from current spending of $222 million. The good news there, Mitchell said, is that “we are effectively leveraging more than three state dollars for every city dollar we invest in our schools.”

As in past budget messages, Mitchell stressed the need to use whatever limited controls there are to manage non-discretionary items, including pensions and insurance. 

“The reality is that in the long run we have to come to terms with these major budget drivers, or we stand to undermine our ability to deliver the municipal services our residents expect, at tax rates they can afford,” Mitchell said. 

Mitchell urged the council to look for ways to cut health insurance costs over the long term without substantially diminishing coverage. 

That could include adopting state law allowing adjustments in health plans —  such as co-pays, premiums, deductibles — to be subject to binding arbitration. City unions have opposed such steps in the past and the council has declined to take them.

Mitchell specifically mentioned “poor decisions by the Retirement Board and previous administrations and City Councils that have made our annual pension costs unaffordable.”

Mitchell last month criticized the Retirement Board for voting once again for the maximum allowed annual cost of living adjustment, or COLA, of 3% on the first $14,000 of the yearly pension for some 1,800 beneficiaries. Since local retirement boards took over decisions on these adjustments in 1999, the five-member New Bedford board has voted for the 3% maximum every year but one. That year, 2020, the board approved a 2.5% COLA. 

The Retirement Board’s COLA votes have to be approved by the council, which could refuse and ask the board to reconsider. City spokesman Jonathan Darling said the council has never done that.

The spending plan includes a nearly $40.7 million pension contribution, up about 7% from the current allocation of nearly $38 million. 

Last month, and in his remarks on Wednesday night, Mitchell pointed out that of 105 local retirement systems in Massachusetts, New Bedford’s is the fifth worst in terms of a key measure of financial health, the fund ratio. New Bedford’s ratio stands at 52.2%, meaning just over half of the system’s total obligations are covered by money currently invested. 

The system is about $390 million short of full funding of $816 million. Plans now call for making up the shortfall by boosting pension spending about 6% a year through 2035.

The proposed general fund 6.2% boost is due in part to spending 10.5% more for the Police Department. The increase has a lot to do with the New Bedford Police Union and the city signing a new three-year contract last summer including pay and benefit increases meant to help attract and keep police officers. According to the union, which represents all uniformed officers through the rank of captain, the budget covers 258 officers, but the department has only 211.

The mayor is proposing one new item in the form of a staff position, a chief of innovation and policy development. According to the mayor’s office, this person would be hired to “identify and implement new technology and policies to improve the quality, efficiency, and cost-effectiveness of municipal services.”

The position was advertised last month with a starting salary of $96,000, ranging up to a maximum of $150,000 with step increases over time. That figure does not appear in the budget as a line item, but a footnote says the cost of this “citywide resource” would be covered by other departments paying for the staff services. 

Council President Naomi R.A. Carney expressed skepticism about this on Wednesday night. The so-called “chargeback” approach to paying the salary doesn’t mean it’s not an expense, she said. 

“Excuse me, it’s still here,” said Carney, pointing to the figure of $441 million proposed to be covered by “ordinary revenue and municipal receipts,” including $160 million in property taxes. 

“Right now, I don’t think we should burden the taxpayers with additional money,” said Carney, an at-large councilor.

Editor’s note: This story was updated on May 16, 2024,  to clarify the starting salary for a proposed chief of innovation and policy development position.

Email reporter Arthur Hirsch at [email protected].

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