The end of the fiscal year in Springfield, Massachusetts is on June 30th and elected officials are debating what to do with the city’s surplus cash.
Springfield Mayor Domenic Sarno proposed a series of orders for City Council approval to allocate $28 million in free cash -- $2.5 million would go to street and sidewalk repairs, $3 million for neighborhood improvement projects, and $5 million to offset next year’s property tax bills.
“I want to be able to bring relief (on) property taxes to residents and businesses,” he said.
The largest sum of free cash, $17 million, Sarno wants to sock away in the city’s stabilization reserve fund – the so-called “rainy day account.”
“We have to be fiscally prudent,” Sarno said. “You can’t just sling from the hip and the next thing you know you are in trouble.”
But some City Councilors have another idea. More of the free cash should go toward knocking down property tax bills, said City Councilor Victor Davila.
“I’m very concerned with the property taxes,” he said.
At Sarno’s urging, the City Council last year put $10 million in free cash toward property tax relief, but the tax bill for the average single-family home still went up by $200.
Eyeing a recommended city budget for the next fiscal year that would see spending increase by more than 7 percent, many Councilors expect property taxes will have to go up to pay for it.
The impact of the budget on the tax levy won’t be known until near the end of this calendar year when new tax rates are set. Councilor Zaida Govan said the Council needs to signal now to homeowners that they won’t get crushed by higher taxes.
“ I think it is time for us to let the residents know that we appreciate them, we want them to continue living here,” Govan said. “I’ve been talking to people who say they’re going to have to sell their houses because they can’t afford the property taxes.”
If $17 million is added to the stabilization reserve fund, there will be $68 million in the account.
It is not a good look for the city to be sitting on such a huge pile of money while many residents are struggling with high price inflation to make ends meet, said Councilor Tracye Whitfield.
“I’m just saying ‘why couldn’t we do a little bit more?’,” she said.
The $17 million doesn’t disappear if it is put into the rainy day fund, argued City Councilor Tim Allen, chair of the Finance Committee. It’s available in the event of an emergency, or it could be used down the road to offset the tax levy, he said.
“We don’t lose any money,” Allen said. “We’re not going online shopping, or something. We’re just putting it in a place where we can go back and get it if the case is made to do that.”
Up against the rule that ends Springfield City Council meetings at 10 p.m. unless there is unanimous consent to continue, the debate over the fate of the free cash went to 10:30 p.m. Monday without a final resolution.
City Council President Jesse Lederman said he will schedule a special meeting before June 30th to continue the debate over the free cash.
