Lincoln City Councilwoman Cyndi Lamm and Mayor Chris Beutler sparred Wednesday over a complicated error with potentially major implications on the city budget.
Twice in the past five years, while the City Council did not approve an annual resolution allowing the city budget to grow by an extra 1 percent, the Beutler administration nonetheless reported to the state that those resolutions had passed and now refuses to correct that record, Lamm says.
Beutler says the real issue is budget problems the city will face next year if the council does not pass a budget growth resolution this fall.
Lamm's focus on an historic reporting error and her "partisan attack" obscures the serious budget problem facing the city unless six of the seven City Council members agree to 3.5 percent budget growth over the next two years, the mayor said.
The two Lincoln elected leaders battled via news release and news conference Wednesday evening over the budget resolutions, which allow the city to grow its budget by more than the standard 2.5 percent allowed each year under state law, as long as a supermajority of the council approves.
Beutler and Lamm disagree on the merit of allowing the higher 3.5 percent growth and on correcting the city's past reports to the state auditor.
The mayor warned of serious budget problems should the council not allow the extra 1 percent growth in each of the next two years.
The council's refusal to pass the growth resolution in two past years is now creating a "growth barrier" to future budgets, Beutler said.
Failure to allow the additional budget growth "destroys the flexibility needed to hire new police officers and firefighters while maintaining library hours and keeping swimming pools open," he said.
Without the 1 percent increase, "we cannot keep pace with the annual inflationary and growth costs of providing needed services, and our city cannot grow," Beutler said.
Unless the council takes action within the next 12 months, the city "will be severely limited by this growth barrier in the next budget year," and there could be service cuts, he said.
Beutler said he will ask the council to consider a resolution this fall, adopting the additional 1 percent spending authority for the upcoming two-year budget.
"Failure to pass the resolution will strangle our city's growth and set our community back for years," he said.
Beutler said the 3.5 percent spending resolution is not about raising or lowering taxes.
But, Lamm said, maintaining the spending limit, without any exceptions, “protects taxpayers from rapid growth in budgets that leads to excessive property taxes.”
Raising the budget lid doesn't automatically increase the budget. However, it gives the city greater spending authority, which can be carried over from year to year, even if the city doesn't use that authority.
Lamm says the city administration erroneously reported the council had approved the higher lid in two past years. State law requires a three-quarter, supermajority vote to approve exceeding the standard limit. With a seven-member council, that would be six votes.
In the 2012-13 and 2013-14 budget years, the council voted 5-1, with one member absent, to approve the higher 3.5 percent growth. Beutler’s staff recorded that as a three-fourths majority because only six council members were present.
They reported to the state that the city had been given authority to raise the spending lid.
The state auditor's office recently told the city that its 75 percent calculation should be based on all seven members of the City Council, no matter how many are present, but indicated the city did not have to change those previous reports, Beutler said.
Lamm believes the city ought to correct "these illegally reported votes. But the administration has refused to do anything."
“Because of this error, and because of the city’s rapid budget growth, Lincoln taxpayers have not been afforded the full protection of state law and are now backed into a corner,” she said.
“What happened isn’t right and raising the spending limits without the legal number of votes fails to provide the type of honesty and transparency I promised my constituents when I asked them to vote for me,” she said in a news release.
The city has cleared this issue with the state, Beutler said. "We need to address the real issue and not get side tracked by these side issues."
"The truth needs to be stated and stated strongly. The truth is, this (refusal to approve a higher budget growth) is killing growth in Lincoln," he said. "Ms. Lamm is out to kill growth. This isn't an issue of raising taxes. This will not lead to a tax increase."
The Lancaster County Board has routinely approved the 1 percent additional growth since 2006, as do most cities across the state, Beutler noted.