As part of the City’s budget process under state oversight it has to prepare its annual operating budget and capital budget along with a five year forecast of operating revenues and expenditures. This year’s forecast takes the City through the end of this decade to 2020.
Two critical events that the City has known about and we have written about for some time now are within sight of the coming five year period. In 2018, the City’s infusion of value plan for its pension funding continues and ramps up as the $13 million it is currently dedicating from parking tax revenue doubles to $26 million. Parking tax revenue is projected to grow about $1 million annually and would be at $56 million in 2018 based on the current forecast. At this point there is supposed to be one more rate hike by the Parking Authority in 2017. The expenditure category of “pension and OPEB” is forecast to increase $22 million from 2017 to 2018.
Second is the “debt cliff” where the City’s debt service payment falls in 2017 to 2018 from $74.4 million to $45.3 million and debt service as a percentage of expenditures is to fall from 13% to 9%. While debt service in 2020 is projected to be $41.6 million less than in 2015, pension and OPEB and health benefits are expected to rise $45 million.
