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Sarasota Thursday, Jul. 11, 2019 1 year ago

Sarasota's spending is outpacing its growth

It is symbolic of a bigger issue: Who's in charge? Citizens? Commissioners? City manager?
by: Matt Walsh Editor & CEO

Don’t let all of these numbers scare you. They’re revealing. As the clichés go: “The devil is in the details,” and, “There is more than meets the eye.”

Indeed, the two tables tell you more than where your city tax dollars are going. They also illustrate a bigger issue at Sarasota City Hall. 

Before getting into the details, however, we’ll save you time and give you the quick summary. 

Sarasota City Manager Tom Barwin said in his 2019-20 budget message released this week, the city “is holding the line on taxes.” He also said, “The fiscal year 2019-20 budget continues the cautious discipline of living within our means.”

Technically, he is correct. The city intends to keep its millage rate, and it will balance spending with

income, as required by law.

But here’s another truth, revealed in the lower table: The city’s spending rate over the past two years and going into the next fiscal year is two-and-a-half times faster than the city is growing. 

Some might say Barwin is on a spending spree, certainly compared to the average middle-income taxpayer’s spending rates.

Focus on the three boldfaced percentages in the bottom chart: +14.5%, +7.8% and +23.4%. And in the table above, focus on the numbers under the headlines in red. 

We will venture to say it’s not likely that your take-home pay (if you’re working) is growing fast enough to allow you to increase your personal spending 14.5% in a year and say that you are still living within your income. And it’s probably not likely your income has risen 23%, or at an average annual rate of 7.8%, over the past three years to allow you to spend at that rate.

Barwin is able to make the claims about holding the line on taxes and living within the city’s means for two simple reasons: rising real estate values and new construction. When property values rise, say, at 7% in a year, as they did last year, that just means more property-tax collections. In this case, the city is expecting to collect $3.4 million more in property taxes next year.

And we all know what government does whenever it takes in more money: It spends it.

Look at the growth in city staffing. Over the past two years and next fiscal year, the city will have added 104 people to its payroll. Barwin says this is in response to population and visitor growth. Even at Tuesday’s City Commission meeting, city staffers made their case to commissioners the staff is stretched. 

But where’s the data? Where are the call logs showing backlogs of citizen complaints? Where are the logs documenting mounting overtime pay? As commissioners proceed through their budget hearings, perhaps they’ll actually probe more deeply.

A good benchmark to begin this discussion would be the measurement that is commonly used to keep government spending in check — limiting spending growth to the combined growth rates of inflation and population. Colorado and its Taxpayers Bill of Rights serve as a great model of how this works.

In 1992, Colorado voters approved a constitutional amendment that prohibits state and local governments from spending revenues collected under existing tax rates that exceed inflation and population growth. Excess revenues are to be refunded to taxpayers. The only way around the spending cap is with voter approval.

Of course, Colorado politicians and government officials hate TABOR, and they’re always trying to change it or kill it. But ask any economist or business owner in Colorado, and he or she will tell you TABOR is one of the chief reasons Colorado’s economy is booming and consistently ranks among the most robust in the nation.

Our bet is City Manager Barwin would chafe at TABOR. It certainly would crimp his spending, which, based on the 2019-20 proposed budget is in order.

And that brings us to the larger issue for which this budget is emblematic: the city’s top leadership — the city manager and those who are the policy makers, the city commissioners.

As most people know, in any organization the way it functions and operates, the direction it takes, its accomplishments — all of that starts at the top. And the more we observe, the more we question: Who’s in charge? The citizens of Sarasota? The city commissioners? Or the city manager? Who’s serving whom?

In his budget message, City Manager Barwin makes this point: “Our optimism short term is highlighted by the news that property values have increased citywide by 7.1% this year, for a total of 63% during my tenure as city manager over the last eight fiscal years, following their 34% decline from fiscal year 2008-09 through fiscal year 2011-12.”

And much good has occurred during his tenure, as he noted, record downtown condo and apartment construction; the long-awaited gentrification of the Rosemary District; parking garages on St. Armands Circle, Palm Avenue and State Street; a financial and programmatic turnaround at the Van Wezel Performing Arts Hall; roundabouts that are working on Main Street and Ringling Boulevard; streetscape improvements on Main Street.

These are a combination of many people’s efforts, including city staffers, the City Commission and Barwin.

But over the past week, in the wake of the commission’s discussions about whether to issue nearly $20 million in bonds to renovate the Bobby Jones Golf Club, we queried nearly a dozen Sarasota business people and public officials about their interactions with the city manager.

Those we queried typically brought up the list of lulus: the lift station, parking meters, the Harvey Vengroff affordable apartments, the fight with Sarasota County over CRA funds, Lido Beach dredging, the Lido Beach Pavilion redevelopment, form-based code, E-mailgate and Bobby Jones Golf Club.

A developer told us the surge in downtown development is not at all a result of a welcoming business climate. “In fact, it’s becoming more difficult,” he said. Another community leader related, “[Barwin] is 10 times better than the two previous managers, but he has lost my trust.” This leader relayed how the city manager nearly undermined a project after committing support.

With this budget, Barwin has reinforced doubts about the city’s fiscal management. City commissioners need to give taxpayers confidence they are watching out for them.

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