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Democracy on the Front Lines
City Administrators Blog
Walter Denton
March 20, 2009
A few weeks ago, I blogged about how our annual budget is structured. Today I will discuss our revenue situation. Our total budget for FY2009-10 is $45,513,175, which means we have $45 million in revenues to equal $45 million in expenses. We are required by state law to have a balanced budget. This is a 3% decrease from last year’s budget. The General Fund is $13,525,850 and is an 8% decrease from last year’s budget.
Sales tax comprises the largest part of the General Fund (48%). We are projecting a 9% decrease in sales tax, primarily due to slower car sales. However, we are projecting a 9% increase in the State Income Tax revenue, which includes increases from the Special Census conducted last year.
Out of your entire property tax bill, the City’s portion is about 11%. The vast majority of your property tax goes to School District 90 (38%) and OTHS District 203 (26%). Property tax comprises only 2% of the City’s budget and is ranked eighth among City General Fund revenue generators. Once again, we have reduced our property tax rate as an attempt to mitigate the Township Multiplier added by the County Tax Assessor.
The property tax levy supports General Fund programs such as police, street maintenance and construction, and general administrative functions. It is also levied for special functions of library services, parks and recreation, emergency medical services, employee pension funds, and fire protection.
The General Fund is the main fund for the City and it provides the budgets for Administration, Police, Planning & Zoning, Streets, Police and Fire Commission, Economic Development, and Cemetery. The revenue for the General Fund is proposed to be derived as follows:
Source |
Budget Amount FY2010
|
% of Total |
% Change From FY2009 Budget |
Sales Tax |
$6,419,520 |
48% |
-9% |
State Income Tax |
2,718,500 |
20% |
9% |
Utility Tax |
1,046,600 |
8% |
-19% |
Phone Franchise |
829,100 |
6% |
5% |
Food & Beverage |
560,000 |
4% |
1% |
Building Permits |
200,000 |
1% |
-50% |
State Use Tax |
414,850 |
3% |
14% |
Cable Franchise |
255,000 |
2% |
-2% |
Property Tax |
245,845 |
2% |
9% |
Road & Bridge |
216,300 |
2% |
4% |
Court Fines |
180,000 |
1% |
8% |
Subdivision Fees |
10,000 |
0% |
-100% |
Other |
430,135 |
3% |
-113% |
TOTAL |
$13,525,850 |
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-8% |
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All revenue sources related to development have decreased, including Occupancy Permits, Building Permits, and Subdivision Fees. Another interesting decrease is the Utility Tax. I blogged a long time ago explaining how our Utility Tax is tied to usage and not to rates, so the recent rate increases have no effect on our Utility Tax revenues. Even with the increase in new homes over the past year, our Utility Tax revenues continue to decline, which indicates that residents have been successful in conserving energy since the rates increased.
Put all of this together, and we have budgeted for an 8% decrease in operating revenue. The slowing economy has impacted our budget just as it has other businesses. The City made significant cuts last August (including one layoff and a hiring freeze) that are still in effect for the next budget. Other cuts also were made to balance the reduced revenue estimates. However, this budget is based on the assumption that the same high levels and types of municipal service should be continued in all departments. Despite the decrease, this budget provides the necessary resources to continue existing service levels and programs. If revenues decline further than anticipated in this budget, the City may have to consider painful service cuts but we are not there yet and hope not to implement them.
In a future blog, I will address the spending cuts and expenditure side of the budget.
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