Burlington's budget deficit grows 45% over earlier forecast due to clerical error

Burlington faces a budget deficit nearly 45% greater than projected by the city on the fiscal 2024 budget, Mayor Emma Mulvaney-Stanek said on Thursday. The deficit now stands at more than $13 million, compared to the $9 million projected in December 2023.

Mulvaney-Stanak said she learned about the $3.4 million increase in the deficit when Chief Administrations Officer Katherine Schad told her there was a clerical error in totaling the earlier projection.

Speaking at a news conference at City Hall, Mulvaney-Stanak said the larger deficit meant she "added some changes" to the budget she had been developing.

While that budget has yet to be finalized, some information was shared with the public.

“One of my commitments to the residents of the city during my campaign and now as mayor is transparency,” Mulvaney-Stanak said. “I am also committed to transparency with city employees, city unions and my City Council colleagues.”

Discrepancy of the deficit

The increase in the budget deficit came as a surprise to many, including Mulvaney-Stanak, who said she learned about it recently from Schad during her first week in office. Schad also spoke at the press conference, sharing that information along with preliminary ideas for closing that gap.

The real revenue is $3.4 million less than projected in the FY24 budget due to the use of "one-time funds." When accounting for the city's personnel, they initially believed they included salary and benefits, but a discovery showed that health benefits were never included.

Mulvaney-Stanak said she did not know of this error until she was already in office, with former Mayor Miro Weinberger having mentioned only that "the gap may be bigger."

She said that Schad came forward with the error and while it was a mistake, Mulvaney-Stanak is happy that she has leaders around her that are forthcoming with errors or potential problems.

The rest of the gap includes a $7 million tentative increase in personnel costs reflecting estimates related to salary growth and increased expenses for benefits. There is also a $2.1 million increase in operational costs for overtime, training and equipment needs for the Police and Fire departments.

Early plans for closing the gap

Next steps include department heads − all of whom were standing behind Mulvaney-Stanak in Contois Auditorium − reviewing their budgets and giving appropriate recommendations, meetings with community advisors who will give their advice on budget solutions, a April 29 meeting with the Board of Finance that will be receiving a budget update, and department-level budget presentations that will begin in May.

Closing the gap is doable, according to Mulvaney-Stanak, but it will take a well-thought out budget to save on expenditures while also freeing up funds for priority needs. Some initial ideas include:

• Finalize and implement recommendations from operational efficiency study.

• Employ recommendations from user fee study.

• Utilize American Rescue Plan Act funds leftover from closed programs to help close gap.

• Increase city portion of the hotel portion of gross receipts tax from 2% to 4%.

• Implement voter-approved $.03 increase to public safety tax.

• Additional solutions being researched and developed by the mayor and her office, department heads and budget advisors.

Mulvaney-Stanak said more will be explored and the budget may change many times before being finalized. She said she's committed to finding the "right-size services" and exhausting all solutions and doesn't anticipate any layoffs in regard to the larger deficit.

"We will generate revenue from other places before that," Mulvaney-Stanak said, again emphasizing her commitment to transparency. "It is a last option and I value the partnership with city employees."

Sydney P. Hakes is the Burlington city reporter. Contact her at SHakes@gannett.com.

This article originally appeared on Burlington Free Press: Burlington VT mayor on budget deficit jumping due to clerical error