What is included in the FY 2018 proposed budget as a Contingency for Economic and Budget Uncertainty?
Actions discussed and/or taken by the new Administration and/or Congress to freeze federal hiring and spending, downsize federal agencies, and withhold funding from states and localities pose potential threats to City grants and aid in specific and the regional and City economy in general, which could lead to a decline in projected tax revenues for the City. As a result, the FY 2018 proposed budget includes a larger than normal Contingency for Economic and Budget Uncertainty of $9.1 million from FY 2017 one-time sources. The sources include a $1.0 million fund balance assignment for revenue uncertainties established in FY 2014 in response to federal budget sequestration, $3.6 million in additional real estate tax revenue to be collected in June 2017 resulting from the proposed addition of 2.7 cents on the real estate tax rate, and $4.5 million in design and engineering monies from the Chinquapin Recreation Center 50-meter pool construction project.
These one-time sources of funds are proposed to be set aside to address impacts related to sudden changes in funding from external sources or unanticipated declines in FY 2018 tax revenues. Ultimately, a long-term decline in tax revenue or losses in grant and other intergovernmental revenue will need to be addressed with programmatic adjustments and the reduction or elimination of services. The FY 2017 budget included $4.5 million for design and engineering for a new 50-meter pool at the Chinquapin Recreation Center. With the 50-meter pool not proposed for funding in the CIP, this left the $4.5 million available to be allocated into an economic reserve. To recap, the proposed Contingency for Economic and Budget Uncertainty is comprised of three sources: