Is Fixing the Library Budget This Simple?

conundrumThere’s a solution to the library budget shortfall which is at least simple in theory. But how practical or do-able is it? That merits some discussion, and the discussion leads to more questions than answers.

Here’s the concept:

The current  “retail transactions and use tax” approved by voters in 1998 under Measure B, and overwhelmingly renewed by voters (by a majority of over 76%) in 2002 under Measure C, is set at one-eighth of one percent (0.125%), and at that rate the tax yielded a total of $1,658,323 (actual) for the year 2008.

In Rick Haffey’s October 1st memo to the Board of Supervisors, he described the future budget shortfall, and how it would continue to widen:

As you can see even the optimistic expenditure and revenue projections used in this analysis show the Library finances going in the red to the tune of over $400,000 by June, 2011 and increases substantially from there on out.

It’s not difficult to see how an increase in the sales tax rate from one eighth of one percent to, say, one-sixth of one percent would increase revenues by about 50% and would in itself permanently fix the budget shortfall if everything else stayed constant.

But of course, everything else doesn’t stay constant.

Rick Haffey also refers in his memo to the fact that the shortfall occurs even as revenues are projected to increase. The basic problem is that expenditures are projected to increase more rapidly than revenues.

Why is that? What is it about expenditures that can’t be controlled or made to stay flat even in a time of severe recession? The answer to that may give a clue about why there is such a rush to outsource, with its major restructuring of employment contracts.

The line item expenditures in Rick Haffey’s budget projection which show constant growth in years to come — apparently beyond anyone’s control — are labeled “Salaries & Benefits” (from $1.9+ million in 2011 to $2.1+ million in 2014) and “Services & Supplies” (from $500+ thousand in 2011 to $516+ thousand in 2014).

Obviously both of these categories are driven by employment contracts. How about union contracts? (I’m just asking. I have no idea).

So, although some short term relief could be achieved by a voter-approved sales tax increase (a plausible scenario given this county’s extraordinary support at the polls for past library revenue initiatives), no remedy under the current system looks longterm until overall sales in the county return to non-recession levels.

Nevertheless, would it be possible to buy some time with a higher voter-approved sales tax rate, perhaps structured to drop back to a lower rate as sales revenue grows? Is such an initiative even possible in a time of recession?

Are we in such a hurry that we don’t have time to pursue the tax initiative option?

Is the urgency real, or is it driven by what appears to be an opportunity to restructure the terms of employment of library personnel, and the terms of existing outsourcing contracts?

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One Response to “Is Fixing the Library Budget This Simple?”
  1. Anna Haynes says:

    Don, I am soooo glad you are reporting on this. Thank you.

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