City budget blots out red ink

1
City budget blots out red ink

• M.L. ELRICK AND BEN SCHMITT
• April 13, 2002
• FREE PRESS

2
First Budget Proposal

• Detroit Mayor Kwame Kilpatrick's first budget
  proposal freezes salaries, calls for the Belle
  Isle Zoo to be closed this summer and relies
  heavily on cash from the city's three casinos.
• "I wish I could present a rosier picture to you
  here today," the mayor told the City Council
  Friday morning. "Detroit is a city with
  tremendous needs, but our financial resources at
  this time in history are very limited."
• Blaming an economic slowdown and a deal with
  state lawmakers that reduced the city's income
  and business tax rates, Kilpatrick said his first
  challenge in crafting a balanced 2002-03 budget
  was eliminating a projected 75-million deficit
  in the current budget.

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Reductions

• Kilpatrick said he must cut the city's
  1.5-billion general fund budget by 69 million,
  which he called the first reduction in a city
  budget since 1993. Money for the general fund,
  which pays for city services, comes mainly from
  taxes. The city's overall budget will increase
  from 3.4 billion to 3.7 billion. The increase
  is due primarily to the sale of bonds for water
  and sewer projects.
• He proposed to close the gap through a
  combination of budget trims, spending freezes,
  higher-than-expected casino revenues and cash
  from the deal he announced last month on
  permanent casino agreements. But the City
  Council, which has say over the budget, has yet
  to approve the casino deal. Under it, the casinos
  would bring the city an additional 100 million
  over the next two years.
• City workers bear the brunt of Kilpatrick's
  spartan plan. He said the only way to avoid
  widespread layoffs is to skip raises this year
  and next. Contracts for most city workers expired
  in July.

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Economics

• Base is lower than expected.

Exp
Rev
Shortfall is made up by one time casino
bail-out reduce expenditures
Base