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3/3/2010
Carry-over funds – not magic money for municipalities
I don’t know the nitty-gritty details of the particular situation in Manitowoc, but “carry-over funds” contain critical minutia for city councils to be looking at. It’s a mindset – elected officials must do this stuff one question, one objection, one decision at a time, whether it’s a few bucks at the local level, $hundreds of thousands in the state budget or $10 billion or a $trillion at the federal level.
Manitowoc alderperson James Brey is concerned about carry-over funds. A carry-over resolution happens about this time every year in most municipalities; departments didn’t spend money in 2009 (in some ways you could and should say the bucks were leftover) and they need (want?) to spend it in 2010.
When last year’s money is carried over to this year’s budget, presto! – this year’s budget increases by that much – and becomes the base for the next year’s changes (well, sad to say, 99% of the time, those changes are increases). Pretty nifty, don’t you think? So these carry-overs are just as important for alderpersons to scrutinize as the 2010 budget was last October and November.
In addition to unspent, leftover money from 2009 budgeted expenditures, a carry-over could result because a service was performed and/or money spent in 2009, but the city wasn’t invoiced or hadn’t made payment by year’s end.
Ok. If the service was performed and hasn’t yet been invoiced, that’s one thing. Or perhaps the project was bid out by year’s end and completely ready to roll. Ok. Check that out, but it probably gets a pass.
But if a department truly didn’t get the money spent by year’s end, that’s another thing that taxpayers need to know lots of details about.
So, here’s what to ask…
- Was too much budgeted in the first place? (Don’t spend the leftover.)
- Did a project not get done in 2009 because of a shortage of other resources? If yes, why would it get done in 2010? (i.e., Don’t spend the leftover.)
- Is it possible the project didn’t get done because it was lower on the priority list? (i.e., maybe the city need not spend the leftover.)
These carry-overs, no matter how small or large, should not be automatic. Get the details (the news article linked above contains good detail – not everything needed for a decision, but a start). The default position is that the money doesn’t get carried over and doesn’t get spent. Leftover, budgeted money is not free to be spent. Municipal governments should instead be stowing away leftovers to give back to the taxpayers by offsetting next year’s tax levy.
Jo Egelhoff, FoxPolitics.net
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