That's the difference in the projected revenues and expenditures for fiscal year 2005-06, which begins July 1.
"It's one huge challenge," said Fabrizi, as he and other administration officials try to find a way to pay for current municipal services without having to increase taxes.
Problem areas include skyrocketing employee health care costs, the anticipated settlement of 13 labor union contracts, personnel shortages in the police and fire departments that have led to excessive overtime, and the expected reduction in some state and federal grant programs.
In addition, city debt payments are expected to increase because the city is pursing plans to build five new schools in the next few years, and Board of Education supporters are pushing for higher spending on the schools.
The goal is to avoid a tax hike despite what Fabrizi called "shrinking revenues at the federal and especially the state level, increases in the cost of living, spiraling healthcare costs and all the open [employee] contracts."
Due to the need to close the projected gap, Fabrizi said the possibility of layoffs at City Hall is "absolutely" on the table for the new budget year. "No department is sacrosanct," he said.
City Council member Robert P. Curwen Sr., Budget and Appropriations Committee co-chairman, said while it's uncertain at this early stage if any municipal positions will have to be eliminated in 2005-06, job vacancies that occur in city government due to retirements and resignations should not be filled.
"We need to maintain the status quo in terms of services while keeping taxes down," Curwen said of the new budget. "That's our goal."Budget plan unveiled soonThe mayor will release his recommended budget April 5, and the council then will spend at least a month deciphering and debating his proposed spending plan.
A final budget should be approved sometime in mid- to late May, and take effect July 1. That's when city residents will find out whether their taxes will go up, down or remain the same.
The budget for current fiscal year 2004-05 is about $429 million, and the mill rate is 38.9. That means people pay $3,890 for every $100,000 in assessed value for their property. Property is assessed at 70 percent of its market value in Connecticut.
The level of state aid is a critical component in putting together the city budget, especially for education. The state budget sometimes is not completed until after the city must ratify its own budget.
The state provides about 75 percent of the city's school budget, and education spending represents about 40 percent of the overall city budget.
City officials and education activists have been intensely lobbying the state legislature to increase school aid to the city, complaining Bridgeport historically gets much less than comparable cities such as Hartford and New Haven.
City Council President Andres Ayala said the upcoming fiscal year 2005-06 is shaping up as another difficult budget year. "It definitely will be tough," he said, pointing in particular to the rise in health care costs and high police overtime payments.
Ayala declined to predict whether the tax rate will have to increase. "It's way too early to say, but I can say the council is committed to leaving no stone unturned to avoid higher taxes," he said.
Fabrizi pointed out that taxes are expected to head upward in almost all towns in the region. Bridgeport gets its budget proposal later than the majority of surrounding communities do, making such comparisons possible.
"All the towns are having problems, and all of us at the local level only have the property tax to raise more revenue," Fabrizi said.
Curwen expects the city budget to increase by only about 2 percent in 2005-06, which he said would be below the average of about 4 percent in other municipalities. "Our growth in the budget will be below the norm," he said. Dealing with specificsFabrizi said the city's health care costs are expected to go up by $11 million to $16 million in 2005-06, which would represent a double-digit increase.
A few months ago, health care expenses in the city's current budget were projected to be $6 million higher than planned, but that anticipated deficit now has decreased by half. City officials warn that healthcare costs go up and down on a monthly basis, and are hard to project on a short-term basis.
Thirteen city labor unions have contracts that expire July 1. When Fabrizi became mayor in early 2003, he settled 11 outstanding contracts, but most were retroactive and are up for renewal again.
"We're finding ourselves in the same boat now," Fabrizi said.
Workers generally received a total salary increase of 4 percent over a three-year-period in the earlier settlements, which were considered favorable to the city. It's uncertain if the unions will agree to similar terms again.
Police overtime had been way over budget earlier this year, but Fabrizi said it's now under much better control with former Police Chief Wilbur Chapman gone. The City Council bought out Chapman's contract late last year.
Fabrizi said the interim police chief has found ways to re-deploy staff to hold down overtime, and he hopes the same thing can be accomplished in the fire department.
Both the police and fire departments are short of their budgeted staffing, but Fabrizi said it's uncertain if the city can afford to hire a lot of new personnel for the departments.
While understaffing leads to more overtime costs, new employees also are expensive due to their salaries, health insurance, pensions, other benefits and equipment.
As of now, a class of 15 new police officers is expected to begin in September, but that could change. "The budget will drive what we do," Fabrizi said.
Curwen said the city needs more police officers and firefighters, but paying for them will be difficult. "The staffs are being depleted," he said.
He complained Chapman "was a run-away train when it came to overtime," with projections showing that overtime would have been up to $12 million over budget for the 2004-05 fiscal year if changes in personnel assignments hadn't been made. |