We’re publishing a story this week on Haines Borough fund balances to shed light on an element of the annual budgeting process that doesn’t get much attention – how much in savings our local government should keep in its wallet, after paying its bills.
Keeping some money in savings seems like a good idea, but the rub is the money the government keeps in savings is your money, cash that you might rather have returned to you in the form of reduced taxes or improved services.
Government officials say they need to keep a cushion for a rainy day. That sounds prudent. However, unlike you and me, our government already can raise money at any time – through taxation.
It seems odd for the borough to scrimp while maintaining savings equal to half as much money it plans to spend in the entire coming year. It’s a safe bet that most families and businesses here manage to get by without a cash cushion equal to half their annual spending.
Our school district also socks away money. Its planned general fund balance of $464,000 for a $5.5 million budget compares to a fund balance in Sitka of $400,000 for a $19 million school budget. Further, Haines keeps a “facilities and equipment” budget with a balance of $330,000. Sitka’s school district doesn’t even have such a separate fund for improvements.
The amounts of our school district’s fund balances are relevant because the borough pays about $1.78 million into school operations. If the school district could get by on, say, a $300,000 general fund balance, the borough would save enough money to keep open its pool and museum, facilities currently proposed for seasonal closure.
School district officials would likely resist such a reduction. They say their fund balance may be needed to cover raises for school teachers resulting from contract negotiations currently under way. Similarly, borough employees also are engaged in contract negotiations.
Fortunately for government workers, union negotiations seem to always wrap up after the budget process is complete, when governments are done discussing cuts and have compiled their fund balances.
Fortunately for taxpayers, borough leaders are still putting together their budget for the coming year. There’s time to ask your elected representatives about their budget priorities, and to express your own.
– Tom Morphet