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Rules committee approves limit on how much of the budget can come from general fund to balance budgets
Summary
After a lengthy debate, the Rules Committee approved a bill setting a 1.25% ceiling on use of general fund for balancing proposed budgets; the measure passed 4-3 amid disagreements over whether it would hamstring future councils.
The Rules Committee voted Jan. 21 to forward a measure that would limit how much of the city’s general fund can be used to balance the proposed budget. Council Member Will Lane’s ordinance would cap use of the general fund at 1.25% of the proposed budget when determining whether a budget is balanced.
Proponents said the cap would restore budget discipline after several years of larger draws on the general fund. “We’re basically saying let’s not set a new record on how much we’re going to use from the general fund to balance our budget,” sponsor Council Member Will Lane said, explaining the figure is tied to historical highs.
Opponents, including Council Members Michael Boylan and Terrence Freeman, said the restriction could handcuff future councils and administrations when urgent needs or one-time opportunities arise. “Mandating limitations, particularly as it relates to the use of operating emergency reserves, calls into question the confidence the introducers may have in our ability to continue to demonstrate sound fiscal judgment,” Boylan said.
Council auditors and administration staff briefed the committee on how the city has drawn on reserves in recent years and noted the city must still comply with state law requirements for a balanced budget. Audit staff told members that the city’s unassigned general fund balance has fallen from roughly $416 million (as of Sept. 30 in an earlier year cited in committee) to a projected $340 million, and that multi-year deficits and upcoming commitments informed the sponsor’s concern.
The bill passed the rules committee on a 4-3 vote; members who voted yea said the measure would establish a realistic starting point for budget negotiations, while nays cautioned it could restrict the council’s ability to respond to unforeseen emergencies or policy priorities. The committee’s vote sends the ordinance to finance committee for further consideration.
The vote on the proposed rule was 4 yeas and 3 nays. Committee members recommended additional legal review of state statutes raised during debate before final action by full council.
