Facing revenue reductions, Miami-Dade asks all departments to plan for 3% reduction
By Risa Polansky
To avoid dipping into county reserves this fiscal year and to prepare for an impending budget-slashing session next year, Miami-Dade administrators are asking county departments to cut their costs now.
"What we've asked all departments to do is identify plans to reduce their total department's expenditures by at least 3%," said Jennifer Glazer-Moon, director of the Office of Strategic Business Management, which oversees the more than $7 billion budget.
The savings plan entails cuts that would remain beyond this year. The cuts are to come in advance of quantifying any potential budget gaps this year.
The county continues to work on its projections as first-quarter information rolls in, Ms. Glazer-Moon said, but because signs point to revenue reductions, officials are acting early.
It's apparent already that sales tax and related state-shared revenue will fall and could be reduced further as the state balances its own current and future budgets, she said.
And user-fee dependent departments such as building, planning and zoning have taken hits in the struggling economy.
"The economic slowdown has affected all departments... all of our revenues are slowing down," Ms. Glazer-Moon said.
Property tax revenues are also expected to slow.
State law allows local governments by majority vote to set millage rates as high as would generate the same revenue as the year prior, adjusted for new construction, she said.
Next year, "that means raising the millage rate in order to generate that revenue."
But that's up to the county commission.
"We don't know what the tolerance is going to be for that," she said.
Though administrators can't control commissioners, they are working already to adjust departmental budgets to the times.
"Although the FY 2008-09 adopted budget was built upon sound and conservative revenue estimates, the economic outlook of our region and the shortfalls estimated at the State of Florida Revenue Estimating Conference in November are cause for concern," County Manager George Burgess wrote in a December memo introducing the new savings plan to department heads.
Other factors have also contributed.
Added expenses for November's presidential election and the $3-plus million run-off election for property appraiser in December "have eroded expected savings," Mr. Burgess wrote. "It is necessary to now implement a significant savings plan to mitigate what will be significant fiscal challenges as we begin to plan for FY 2009-10."
The county's fiscal year runs Oct. 1 through Sept. 30.
Mr. Burgess is requiring all departments to identify savings that would reduce each budget by 3% this fiscal year.
"These plans should consider adjustments including but not limited to personnel, overtime, fleet, travel and the postponement and/or elimination of operational capital expenditures," he wrote, including personal computers and office renovations.
Ms. Glazer-Moon stressed that "whatever they have proposed for this year needs to be recurring" rather than one-time cuts to allow savings to carry over into next fiscal year.
"We know we're going to have to reduce even more going into (fiscal) '9-'10," she said — at least another $200 million after cutting the same amount the past two years running.
Commissioner Katy Sorenson, new chair of the commission's Budget, Planning and Sustainability Committee, anticipates the same.
In general, she has reservations about across-the-board cuts, but "3% is probably a reasonable place to start to look at some efficiencies that can be created in the county," she said.
Moving forward, Ms. Sorenson hopes for more in-depth analysis to detect opportunity for greater savings in some areas, she said, and even to identify others that should receive more funding.
"The budget is the policy" for the county, she said.
Her plan is to discuss in committee "the purposes we really want this government to fund — and that may mean some better adjustments than just across-the-board decreases or increases."
Ms. Glazer-Moon said officials recognize the 3% across-the-board mandate may not work for every department.
"Depending on what the impact is of what they are saying they would need to do with the 3%, we may or may not have every department hit 3%," she said.
For smaller departments that wouldn't be able to function with 3% less, officials will have to either decide to shut them down or allow for a smaller cut.
Making the cuts could mean reducing services, but Mr. Burgess said in his memo that facing that reality now should mean an easier transition to next fiscal year.
"Immediate action will allow for the phase-in of any required service reductions, rather than forcing abrupt reductions in October of next year."
Despite the grim outlook, he assured staff that "I am confident we will be able to continue to fund our priority activities at acceptable levels."