What's different about the Mayor's FY2020 proposed budget?

Apr 15

On Tuesday, April 9th 2019, Lexington's new Mayor, Linda Gorton, announced her proposed FY2020 city budget, with a General Services fund appropriation of $379M.
The Mayor's Proposed Budget reflects a decline in estimated revenue for the city while showing a continued increased in spending obligations - like debt and pension payments.
In the short-term, the proposed budget attempts to maintain key city programs while reducing spending in specific areas.
Over the long-term, the budget plans for a continued slowdown in growth of city tax revenue.
The budget also calls for a temporary restructuring of city government by defunding the Division of Planning, Preservation, and Development, eliminating the Planning Commissioner, and breaking up their responsibilities across different departments of the city government.

The Mayor's budget proposes a 15% cut to non-essential programs to close the gap between current revenue and expenses without resorting to raising taxes. This cut is across the board in the General Services Fund - with the exception of Social Services and Public Safety.
The mayor's proposed restructuring of city government would make significant changes to a number of departments and divisions:
- GlobalLex will move to the Mayor's Office
- Planning will move to the office of Economic Development
- PDR and Historic Preservation will move under the CAO's Office
- The Office of Affordable Housing would move under the Division of Grants and Special Programs
- Building Inspection and Engineering would move under Environmental Quality & Public Works
- Code Enforcement would move under Public Safety
- Homelessness Intervention and Prevention would move under Social Services
The city has instituted a hiring freeze for new new employees and has rearranged several governmental departments to make up for vacancies. Hours and dates for some city programs will be adjusted, or cut, and the Mayor's Staff will take a mandatory 12-day furlough.

The revenue growth rate for Lexington last year was 0.5%, down from 4-6% only a few years ago. Wage growth stayed at 0.6%, while job growth was 0.7% - what the city considers to be "full employment". A combination of stagnant wages and low unemployment resulted in less revenue collected as occupational taxes, a major revenue stream for Lexington's budget.
If these trends continue, the city is projected to have a budget gap of $29M by 2023.
Bonding in recent years to cover capital investments like the old Courthouse and Lexington Convention Center renovations and the construction of Town Branch Trail has caused the city's debt ratio to reach 12%. The city has set its debt ratio goal at 10%, the recommended ratio by bond rating agencies.
Even after 15% mandatory cuts, $11M was needed to close this year's budget gap. This $11M was found by utilziing Budget Stabalization funds to address pension issues, raising fees on Residential Building Inspections, and more.
The FY2020 Debt Service is $45,634,892.