Mayor Eric Papenfuse’s amended 2014 budget, which Harrisburg’s City Council is expected to vote on Tuesday night, has been touted as the city’s first balanced budget in years—a sign of the capital city’s successful sacrifices in the form of increased taxes and labor concessions, and a testament to its return to health after unending fiscal crisis.
But a close look reveals that the picture of a balanced budget is somewhat misleading, as the budget actually includes a $4 million shortfall, disguised in the form of a “negative expenditure” representing assumed concessions and other savings which were not realized at the time of its initial passage in December.
Deep within the 176-page budget document, under the “General Expenses” section, is a line item labeled “Concessions and Vacancies,” in the amount of $3,959,157. The item is carry-over from Mayor Linda Thompson’s final budget, adopted at the end of last year, and was retained in the amended budget Papenfuse submitted to City Council in January. The item is listed as a negative expenditure—an amount reducing, rather than adding to, the total expenditures for the year. It represents a variety of savings that the city hopes to realize before the end of 2014.
Some of these, such as the projected $1.6 million in savings achieved under the firefighters’ new labor agreement, approved by a majority union vote last Friday, have already been secured. Others, such as potential reductions in health care costs across a smaller city workforce and reductions in overtime, are hoped for but not guaranteed. The just-under $4 million figure also includes certain city positions that are budgeted for but have not yet been filled. If the city doesn’t realize all the savings that it hopes for, it could close the gap by leaving some of these vacant.
Steven Goldfield, a financial advisor to the receiver, said that the negative expenditure, while “unconventional,” should not be taken to imply a funding deficit. “We’re not going to let them adopt a budget that’s not balanced,” he said. He attributed the line item to the city’s former finance director, Robert Kroboth, and said he was uncertain why Kroboth had balanced the budget that way. The receiver and his team, Goldfield said, had emphasized to Mayor Papenfuse and the new finance director, Bruce Weber, that the new administration would have to “own this budget,” including the decision to maintain the $4 million negative expenditure line.
Weber could not be reached for comment, but Joyce Davis, the mayor’s communications director, said that Weber, the mayor and council were all aware of the negative expenditure. “It’s part of the budgeting process going forward,” she said.
