Real Estate Tax Setting Problem

There has been some growing public attention to a significant financial issue discussed at the finance subcommittee last week.   The city will release more information soon, but here is my view of what happened and why.

Each year, when the City Council votes on a tax levy increase, we have maintained a maximum of 2.5%. This is the limit set by law, but since in many past years we have not even reached that, we have what is called “excess capacity." This means we could raise it each year by more than 2.5%, using previous years’ savings, if we chose to. The administration has never proposed this, nor has it been part of any budget plan.

One thing that frustrates me is that the average tax bill always increases by more than 2.5%, despite the appropriation limit. There are legitimate reasons for this, including the shift between residential and commercial properties, variations in residential and commercial growth, the effects of new development, changes in average home values, and other factors. This year, it seemed a bit higher than usual, so I decided to investigate.

I quickly realized that the tax recap sheet submitted to the State by the city increased the levy by 3.15%, about $1.6 million more than the 2.5% we thought we had voted.   This is the same information used by the City Council for setting the tax rate.

The obvious question is: how did this happen? It is quite complicated, but to simplify, the city reports its total appropriations (over $400 million), lists all non-real estate tax revenues it receives for the year, and subtracts those amounts from the total appropriations. The remaining amount is what is allocated to real estate taxes. This is the final calculated number in the process. The state then certifies this number as being within the total levy for Proposition 2 ½.

In the spring, when we begin the budget process, one of the very first numbers we determine for revenue is the real estate tax. This is done by taking last year's total levy (excluding capital-related debt costs) and adding a 2.5% increase, along with our estimate of the taxes from new growth.   

After doing some research, I found a state report indicating that $1.6 million of our excess capacity was used in setting the levy this year, and I knew that was incorrect.  Again, this may be a nuance, but about a decade ago or more, when we had no excess capacity, the state would have rejected our recap sheet for exceeding the allowable levy increase, making the mistake obvious. However, since we had over $40 million of tax levy that we had not used, the state allowed the 3.15% increase and simply reduced our excess capacity to pay for it.  Essentially, use a portion of past years' savings.

Once this was clear, it was not too difficult to determine what happened. Over the last two years, the CFO's office has calculated the revenue figure for real estate taxes incorrectly at the start of the budget process. Both years, it was overstated by about $3 million. Last year, it didn't matter because other unanticipated revenue was available to cover the $3 million overestimate. This year, only about $1.5 million of additional revenue was available, and the $1.6 million shortfall was automatically offset by the excess levy capacity.

As soon as I realized what had happened, I notified the Mayor, as I knew he did not intend to raise the levy over 2.5%.   He began an immediate review of the process. The Mayor has convinced the State to allow us to re-certify the tax levy at the 2.5% level. Additional local revenue has been identified to replace the $1.6 million. As a result, the average tax bill will decrease by about $50.

Once I realized the mistake in the estimated revenue for real estate taxes this year, I recognized it was a recurring error from the previous year. The issue occurred because debt-exclusion taxation was double-counted. As a city councilor reviewing the budget, if I had looked more closely at the detailed year-over-year differences on the revenue estimate sheet, I could have identified the problem. So, although anyone could have theoretically seen it, everyone else, and I too, have relied on the CFO to provide the correct numbers for basic revenue. That is a reasonable expectation.  No one noticed this for two years.

We should expect our well-compensated CFO’s to avoid mistakes like this, or if they occur, to quickly notice them. When working with numbers, mistakes often stand out because they don't fit within the overall budget picture. Any experienced and capable municipal financial professional who manages the budget should see this. However, two years ago, the former CFO made a similar multi-million-dollar mistake when presenting the tax rate to the City Council. That problem was identified earlier in the process and corrected, but it remains equally unacceptable.  Although the same error as this year was made last year, it ultimately had no financial impact; once the year closed out, it was balanced despite the initial overestimate.

Politically, there is a small group of people who will enjoy blaming the Mayor for this. As I mentioned, it’s not reasonable to expect the Mayor personally to have found this error, and he was able to quickly resolve the issue. The area where the Mayor has responsibility—and I am confident he will handle it—is the need to thoroughly review the financial department processes, starting with the Chief Financial Officer.  I look forward to hearing about his approach.

The presentation to the Finance Subcommittee last week was the first notice of an issue that had only been known for a couple of days. The Mayor’s desire was to be immediately transparent with the City Council and the public, rather than wait for written reports. There will be a much more in-depth explanation of the problem and the solution at meetings over the next couple of weeks.  There will be plenty of written background material provided I am sure.

A Defense of Proposition 2 1/2

         For nearly 45 years, Proposition 2 1/2 has shaped the financial landscape of Massachusetts municipalities. Enacted in 1980, this landmark law restricts how much cities and towns can raise property taxes each year. Critics have often debated its merits, but the simple truth is this: Proposition 2 1/2 has proven highly effective. It has given residents predictable property tax bills, maintained local control, and promoted responsible budgeting. The enduring presence of this law, with no significant changes, reflects its success and the balanced approach it provides to municipal finance.

Boston Mayor Wu disagrees.  She recently suggested that it be repealed.  This law has often been seen as a political third rail, and few notable politicians have suggested tinkering with it.  Wu, however, has nothing to worry about, as she runs unopposed, and her suggestion aligns with her high-tax philosophy.  I doubt her position will gain much traction, and frankly, it should not.  But it is still worth talking about.

At the beginning, let’s recognize the obvious: the 2.5 percent cap is arbitrary. There’s nothing special about the number itself; economists or actuaries didn’t set it. But sometimes, policies succeed not because they are perfectly crafted, but because they strike a practical balance. Whether by luck or foresight, the 2.5 percent cap has kept property tax growth in check, ensuring communities can fund essential services without overburdening homeowners. The cap has introduced at least some discipline into municipal budgeting.

A common critique is that the cap doesn’t keep up with inflation. While this point deserves consideration, it overlooks several essential realities. Property taxes are not the only source of municipal revenue in Massachusetts. Cities and towns benefit from state aid, local fees, and other income streams, which help cushion the impact of rising costs. Moreover, the 2.5 percent limit applies only to the prior year’s levy. Revenue from new growth, such as new homes, businesses, and improvements, is not capped. This means communities almost always expand their tax base by well more than 2.5% annually, often by 4 to 5% in reality.

Wu and sometimes others suggest raising, eliminating, or tying the cap to inflation. While these ideas may seem reasonable at first glance, they come with serious risks. It is almost certain that any adjustment would be upward rather than downward. Sudden increases in property taxes would disproportionately affect those who can least afford it, namely seniors, working families, and residents on fixed incomes. We know this because real estate taxes are inherently regressive; they do not consider a taxpayer’s ability to pay. Removing or weakening the cap could cause unpredictable spikes in tax bills, jeopardizing the financial stability of households across the Commonwealth.

It’s easy to forget that not everyone can absorb higher taxes. For many, their home is not just a place to live, it is also their most significant financial asset. Proposition 2 1/2 protects vulnerable residents from being priced out of their communities by runaway property tax increases. By keeping growth predictable, the law helps ensure a wide variety of residents can continue to make Massachusetts home.

It is important to remember, Proposition 2 1/2 is not a straitjacket. The law allows for voter-approved overrides, giving communities the power to increase taxes when necessary and justified. This safeguard ensures that local priorities are respected and that residents have a direct say in major fiscal decisions. Overrides are not granted lightly, nor should they be.  They require clear public support and open debate, providing both flexibility and accountability in municipal finance.

After nearly 45 years, Proposition 2 1/2 remains in effect because it works. The 2.5 percent cap may be arbitrary, but its effectiveness is undeniable. It promotes prudent budgeting, safeguards vulnerable residents, and honors the voters' choice. While no policy is flawless, the alternatives carry much greater risks. Proposition 2 1/2 has, in many ways, established a stable basis for real estate taxation. It remains a practical law that should not be altered to satisfy the political desires of Mayor Wu and others. Any modifications should be carefully evaluated before they are enacted.

 

Myths of a Would Be Mayor

I agree with Geoff Epstein, the keyboard warrior and fledgling mayoral candidate, on a single point: financial support for public education is critical to a community's health. However, a budget is only as impactful as the precision with which it is deployed.  Epstein disagrees; he believes we should throw all our money and then some at the problem without considering the results. He has advocated raising taxes as high as possible and suggests people who cannot afford it should take out home equity loans.

His rambling blog posts constantly try to argue that the Framingham mayor and city council have not been fiscally supportive of the schools. He discounts all seven budgets we have adopted as a city provide the school department with the amount requested.

Epstein loves twisting facts like pretzels to make his points.  One of his favorites is to talk about what he calls the “local contribution.”   To get to that number, he takes the state aid to education revenue we receive and subtracts that from the total school budget and gets to his number.   He never acknowledged that the education aid figure is part of the local contribution.  So, if state aid goes up, making a larger portion of the budget, he says the local contribution goes down, indicating a lack of support in his mind.  He ignores the schools are funded by their own budget, plus over $40M from other aspects of the city budget.

He should examine “net school spending” to see how well Framingham supports the school department. This state-generated figure shows the total municipal spending on education, including the items not directly in the school budget, such as health insurance and retirement. The state requires every municipality to spend a minimum amount in net school spending. In FY 2024, Framingham was REQUIRED to spend $159M.  We spent $201M. Yet Epstein says we do not adequately support education.

I looked at other municipalities and their net school spending to test his theories.  I looked at annual increases in some area towns, the communities along Route 9 between Worcester and Boston, and some similar cities to Framingham.   I tried to get a good mixed bag.  The results do not show what Epstein espouses at all.  It poses the question why do we spend so much and get so little?

The average annual increase in Net School Spending in the selected communities over the last five years:

Community	5 yr Avg Increase
Natick	6.14%
Framingham	5.76%
Quincy	5.43%
Shrewsbury	5.14%
Westborough	5.11%
Holliston	4.44%
Brookline	4.29%
Newton	4.25%
Wayland	4.21%
Braintree	4.21%
Weymouth	3.97%
Wellesley	3.83%
Sudbury	3.66%
Marlborough	2.92%

Despite Epstein’s criticisms, we are second among 14 diverse communities in spending increases over the last five years.

Epstein does not want to face the problems; he wants to throw money at them. The data shows that we spend the money—plenty of money—we need to get results. Compared to other communities and the state as a whole, our achievement results have dropped substantially over the last decade.  

Public sector resources are not unlimited. We must use our resources well to provide the excellent services our children and residents deserve while remaining affordable and accessible. To do this, we must operate efficiently and intelligently.

He delineates all the problems in our education system, and his solution is predictable: more money and higher taxes. He does not question why the Superintendent received a six-year contract extension after overseeing this downturn. Instead, he wants to offer more money despite already providing more than most of our neighbors, which does not seem to work.

If he emerges from behind the keyboard and runs for mayor, as he threatens, hold on to your wallets and let him know that his solutions are too expensive and lack substance.  Untwist the facts, and the picture is much different than he wants us to believe.

Good News from the City

The City Council just finished consideration of the FY 2024 budget and the news is good.  We unanimously adopted a budget that maintains all city services and gives the Framingham School Department the largest increase in many years.  We were also able to limit the property tax increase to about 1%.

 

This year presented an opportunity to continue to minimize the property tax increase, because  many of the other revenues were strong, allowing total revenue to rise almost 5%.  In a year where other revenues are strong it is important to limit the tax levy so we can rely on it when we need to.

 

The average Framingham tax bill is over $7,100, which is fairly significant putting us  in the top 35% of municipalities.   Had we not taken similar steps in recent years to try to limit the tax levy increase as we did this year, the bill would be over $8,500.  That would put us in the top 20% of municipalities, a big chance as to affordability.  I am confident that by being mindful and efficient we are able assure Framingham remains an economically diverse community keeping the increase in tax bills predictable and manageable, while providing support for services.

 

The financial situation as it stands, after a lot of hard work by both the Council and the Mayor, is very positive.  The Mayor announced last week Moodys, which is the third party rating service we use to review our financial standing when issuing debt, gave us the highest possible rating. This is excellent news that Moodys sees Framingham’s financial position as strong and well managed.

 

I am not sure the opinions of Moodys are as important as some think.  But this opinion offered by  Moodys is going to disappoint critics, who were almost guaranteeing Moodys to downgrade Framingham’s bond rating.  Instead, the opposite happened, assuring all that we are heading in the right direction.

 

The Moodys review confirms what I have seen first-hand.  The Mayor and his team have worked hard to rebuild Framingham’s finances, and it looks like they have met with good success.  Their biggest challenge and most impressive accomplishment is the rebuilding of the water and sewer fund.  This fund was devastated by mismanagement and ran a deficit in excess of $20 million from 2018 to 2021.  That deficit shook the foundation of the City’s finances overall as tax money was required to bail out the failing fund.

 

We have to continually stay on top on our finances.  We need to assure that the City provides all the services it needs to, while doing so effectively and efficiently.  This year I think we accomplished that to the benefit of all.

 

This news is particularly encouraging given all the other accomplishments we have achieved over the last 18 months.  We have acquired the right of way for the Bruce Freidman Rail Trail,  signed an agreement with the state that will pave the way for a new justice center at the old Danforth building, acquired the office building next to town hall for a very reasonable price and obtained seed money for a new downtown parking garage.  These are all things that will improve our community.

 

The news is good as we enter the summer.  During the warm days to come, we can enjoy our newly revitalized farmers market, every week on Thursday, staring two weeks from now.  On June 30 this year, Framingham will have a fireworks display for the first time in 23 years.  The summer concert series starts two weekends from now every Friday night on the Center Common.

 

Things are looking up in the City, make sure you are a part of it!

Where are the Democrats?

I feel compelled to comment further on the recent confounding statement made by Mike Hugo, purportedly on behalf of Framingham’s Democrats, at our most recent city council meeting.  

I have made public statements I regret or could have articulated better.  We all have.  Public speaking can be frightening in the present day as it is easy to make a misstatement.   In our very politically correct world, a phrase or a metaphor that used to be acceptable sometimes is no longer.   Make a mistake and there is plenty of accountability to be had.  Even honest mistakes can cause significant consequences.

 

Mr. Hugo, sent an email to the Council members late in the evening of our meeting, saying he had misspoken.  Puzzlingly, he said that the time limit of one minute for remarks, instituted by the chairman, was the reason for him misspeaking.  This was confusing as he had emailed us the full statement that morning, and the offending passages were in that statement.  There was no explanation of how such a thought got in there in the first place.  He promises to address it at our next meeting.  I will look forward to his presence on the 28^th of this month to gain further understanding.

 

The worst part is, it really was not his own statement, as he specifically stated he was making it on behalf of the Framingham Democratic Committee. He also sent an email to the Democratic Committee, apologizing for his statement but in that email, he said, “ I am sure that I will get plenty of attention from the usual haters and social media commentators”. When you are making major public statements on behalf of others, and make outrageous remarks,  you have to accept you will get negative feedback.  Deflecting not yet received feedback as coming from “haters” casts into doubt the sincerity of the regret the email was expressing.

 

After scratching my head about how such a statement could ever be made, I also ponder the absolute silence from the Democratic Committee.   The group is often one that seems proud to hold people accountable for their positions and actions, but they seem quite reluctant to self-reflect in this instance.  How can the Committee fail to issue a statement disassociating themselves from the statement of their chairman who explicitly stated it was made in their name?  Why has there been no formal repudiation of the statement made on behalf of the Committee?

 

I am not currently on the committee; I have been a member and chairman in the past.  As a Democrat, as a former chairman, and as a citizen I am as disappointed in their lack of response, as I am with Mr. Hugo’s selective and limited “apology."

My Statement on Water and Sewer Deficit

 I was stunned to find out this week that the administration needs $2.5 million more to bail out the water and sewer enterprise fund.  This is after an already $3.5 million bail out in the spring.  This means $6 million of taxpayer money is gone forever to prop up the water and sewer fund. 

The water and sewer fund has spent generously over a decade.  From about 2007 to 2017 the public utility operated by the City saw its rates double, creating a large burden on homeowners and businesses alike. Reacting to that burden, the administration has minimized rate increases the last few years to the 2% range.  The problem is nothing was done to slow the spending while easing the rates.  The combination of the artificially low rates and the unexpected pandemic wiped out all the reserves and then some.

 

Spending has been out of control in this fund since about 2007.  The City has hid behind an ill- advised administrative consent order that was hastily agreed to in 2007 mandating almost a quarter billion dollars of construction.  No question some was needed, but not to the extent and scale that was completed.  We are now burdened with huge upward rate pressure, large debt and no spending control.

 

One may say it is easy to criticize; I mean who expected a pandemic?  But the frustrating thing about this is many members of the City Council have been imploring the administration to slow the spending in this fund over the last few years.  Our concerns are not new, just unheeded.  We have asked multiple times for a construction plan that would control rate increases.  Many of us have asked the administration to stop spending capital funds (borrowed money) to pay about $1,000,000 a year in salaries.  

 

During just the last few months we have asked the administration to adjust spending to reflect we are in a pandemic, not normal times.  Some of us were astonished when a rate hearing was not even held this year after spending was set.  When we voiced fear about revenue shortfalls we were told there was a plan.  We just found out the plan doesn’t work.

 

Instead, the spending has continued only marginally abated by City Council efforts in both the general fund and the enterprise fund, with minimal reductions and no structural changes from the administration.  Now we are being asked to craft a solution within a week to ten days and make significant financial decisions that impact the City’s budget.  

 

The problem is not solved with the $2.5M solution being proposed.  First the solution takes 90% of the funds to bail out the water and sewer fund from free cash (the taxpayer’s savings account) or the school department.  It is likely buying your groceries with your savings account and your cousin’s grocery budget.  It does not solve your problem, it keeps you eating for a bit longer.  

 

Even with the bailout, there is likely a double-digit rate increase for the water and sewer fund in the near future.  This is potentially devastating to low and moderate income families and struggling pandemic burdened business.

 

We can’t keep solving the problem with short term solutions.  To take virtually all the money from the school department is a non-starter to me.  I would encourage the school department to participate in the solution, but to put it entirely on their back is absurd.   The proposal is not nearly creative enough for me to rush through the City Council.  We need more time for a practical solution to this unexpected problem.  I hope enough city councilors feel the same to avoid another last minute band aid to be applied to serious financial challenges.

 

Timely Thoughts on Three Topics

I try to communicate in as many ways as possible with constituents, including social media.  In local political circles the last couple of weeks have been busy, disappointing at times, frustrating at times,  and overall a bit of a whirlwind.  Outside of meetings I have been a bit more silent as I wanted to take it all in and reflect.  But, here are some random (but related) thoughts on the happenings of the last couple of weeks:

I am going to start with the George Floyd tragedy, because other issues seem trivial in comparison. 

·      The issues emerging from the incident in Minneapolis resonate everywhere, and for so many reasons.  The obvious struggle we continue to have as a nation with policing and racial profiling once again rightfully becomes front and center.  In this case the behavior was so horrific and so easily accessible through video, no one can deny the issue.  I hope the tragedy results in good and impactful discussions on the philosophy of policing and allows us to make the changes we need whether it be local or nationally. 

·      Mayor Spicer has said she intends her voice to be heard on these issues and that makes sense.  I have no direct insight, so I am wondering if she decides to join other Mayors making specific new initiatives locally.  She announced she will be holding a community hour on the topic with Somerville’s Mayor on June 9^th here in Framingham.   Mayor Curtatone of Somerville has made some far-reaching proposals towards changing policing, including establishing civilian oversight and considering asset reallocation.   To date I have seen Mayor Spicer as very supportive of police, increasing their budget significantly, so I find it hard to believe she will embrace his approach.  Nonetheless it is an interesting choice of colleagues to bring to Framingham.  Whether it is an indicator or just coincidence we will soon see.

·      The public response and activism resulting from the tragedy has been remarkable.  Although there have been some unfortunate incidents in Boston and nationally that took away from the cause at times at the outset, the demonstrations in Framingham have been well organized and thoughtful.  Not only have the local rallies allowed for our friends and neighbors to express their concerns,  for the most part they have  been organized and promoted by new and previously unknown local leadership.  That is a positive that grows out of a negative that we have to capitalize on.

For once the budget is not at the top of my list, but it is at a critical stage.

§  I remain concerned that the proposed budget is not truly balanced, nor does it make the structural changes necessary.  There is too much one-time funding with no future plan to replace it.  There are no innovations or new approaches. Continuing with the status quo is not going to work out well in the current economic environment.

§  There are lots of budget opinions out there and it makes for great discussion.  One city council colleague has written about the budget and said that some Councilors want to make service cuts.  I have to take exception to that as I have not heard any Councilor suggest this.  I personally believe we could reduce some mid-level administrative positions by restructuring our operations and save a significant amount of money.   To date the administration has laid off a few random positions but resisted any cuts to management positions.  To me the approach to date fails as a strategic approach.  The average salary of the laid off positions is about $35,000.  The administration has also defunded vacant positions, but again I question the strategy as not every position that was currently vacant is necessarily expendable.  Reduction in force is sadly necessary at times, but if we do it strategically, we will not impact services at all.

§  Budget discussions are always going to be sensitive and evoke emotions, especially when reductions are being considered.  I think overall the Finance Committee was able to keep that in check.  We agreed in many areas but were unable to agree on potential restructuring of government.  We recommended by a 3-2 vote that several departments be funded only for six months.  This approach was not to save money, because ultimately the balance will be funded, but to put a real deadline on the administration to make recommendations for efficiency and savings in those departments.  Unfortunately, I suspect these proposals will ultimately not be incorporated in the final budget and we will be sticking with the status quo.  Even one of the members who voted against this proposal stated that  he felt the administration has not done enough to make modifications to our government over the last three years.   We need to find a way to make it happen.

§  To double back to the issue of budget related service cuts, I believe we can continue to avoid service cuts with a strategic approach.  One approach I have advocated for was to consider furloughing people who were unable to do the job they were assigned during this period through no fault of their own.  My idea was to furlough people, allow them to collect the enhanced unemployment benefits, and continue to pay their health benefits.  We could have leveraged the federal unemployment money and any employee making $70,000 or less would have been receiving the same or more on furlough. It would have cost the City nothing. The money we saved we could have used to pay salaries in FY 21.  This window is closing as we begin to reopen service, but it represents the kind of strategic opportunities we need to take advantage of to get through this.

§  The way the world has changed over the last three months is stunning, for better and worse as always.  I suspect the way people run their businesses and do their jobs will change to some extent forever.  There have been efficiencies found in many areas.  Just one example, consider all the commuting time that has been saved!  I hope we can learn from it locally and take advantage of the experience to make our municipal operation more efficient and flexible by utilizing approaches we had never thought of or been forced to consider.

For those of you who have been following social media and the like closely, the “restaurant letter” has caused a lot of controversy.  

·      As I said at our meeting last week, I get it.  In a perfect world it may have been approached somewhat differently, and I think it would be next time.  As Chairman of the Council I should have foreseen some of the issues and hurt feelings and done more to avoid that outcome.

·      That having been said, I think some perspective is important too.  The letter did not break any written rules and some of the comments saying it did are a bit exaggerated.  One activist has been stating online that it was sent out on official City Council letterhead that had everyone’s name on it, but only five signatures.  That is the kind of dialogue that people start just to stir controversy.  Either that or they say things without checking the facts.  Our official stationery does not have our names on it in any instance.  The letter in question was not on official City Council stationary, though I acknowledge the casual reader probably would not realize that.  So again, I understand the objection, but let’s not let that get in the way of the facts.

·      Last thought on the “restaurant letter.”  Even if it could have been better executed, it had an impact.  The current administration is often a bit deliberate, some may even say slow, on decision making and getting processes and programs in place.  Despite the small firestorm, I believe this letter sped up this process and made it possible for our struggling restaurants to reopen easier and more efficiently than otherwise may have been the case.  Again, I know they would claim it was well under control without the letter, and maybe it was, but the track record would not support that position.  Our restaurants are in a better position today and that is what matters.

  

There is a lot going on and if you got this far, thanks for reading!  As always I welcome any feedback you may want to offer me.

A Strategic Plan to Preserve Services and Jobs

No matter when it happens, I feel bad for anyone who is laid off or loses a job they love for any reason.  This is a particularly scary time to deal with such things.

I think it is nearly impossible for the City to produce a stable and sustainable budget for FY 2021 without at least some reduction in staff at least in terms of furloughs.  I do not envy the Mayor having to make those choices.  I have been there in the past and it is very very difficult.

To date, I have no idea what the layoff or furlough plan is.  It has not been discussed with me or any city councilor that I am aware of.  I hope it is a strategic plan, that aims to protect our employees and town operations as much as possible.  I hope both the municipal and school administrations make significant attempts to manage the personnel situation quickly and strategically with the clear goal of long-term stability fofr the organization.

I believe several points should be considered as to personnel management decisions that could help our fiscal stability immensely.

1. We are at the point where it makes good sense to leverage the federal and state funding where it is available to stabilize our municipal government.  Many of our employees, through no fault of their own, cannot do their regular job right now.  If we furloughed these people, anyone who was making up to almost $70,000 a year would either make more money or the same money on unemployment due to the CARES act.  The City has a long list of people in this position and could save substantial money.  Money that could be used to preserve these jobs long term.  If we strategically did this we could save an awful lot of money that we could use to keep these people employed long term and not harm them financially in the interim.  I would advocate the City continue to pay the benefits of furloughed employees during the interim period, further stabilizing their experience.
2. The City should not lay off or impact people in any manner that provide direct core services to constituents.  Police, fire, educators, trash collector, highway workers and more are the reason people pay their taxes.  We should use strategic furloughs to fill the gap, and not targeted layoffs of particular people.
3. One area that we can gain efficiency is looking at our middle management structure.  This is an area that has greatly expanded with job creations and upgrades in the last decade.  This is hard for managers to hear and I know that.   Restructuring of this area, which would have to be permanent in this narrow area, can save significant amounts of money, and not impact services.
4. There has been a lot of discussion about pay raises and that is always a challenge because when you lay people off you are asking others to do more.  However, I also think it is symbolic to others who have lost their jobs.  I do believe consideration should be given to reductions in pay, temporarily at least, at least for people who make above $100,000

No question these are awful decisions to make and my heart goes out to anyone impacted.  However, if we do this right, we can minimize, even eliminate, the harmful impacts to people, and actually enhance the long-term employment prospects of most of our employees.  If we do not do it right, it will have a broad-based detrimental impact.  My fingers and toes are crossed we make the right choices.  I am a little mystified by the couple layoffs that have been reported so far, as they do not seem strategic, but I suspect in time we will have a better explanation.

If we do not deal with our significant budget issues now, one thing I know for sure, is next year will be a nightmare and our very core services will be threatened.   We can adopt a well thought out plan or we can flounder through this pandemic, the choice is most assuredly ours