Democracy on the Front Lines
City Administrator’s Blog
Walter Denton
January 22, 2010
For the first time in 19 months, I can report that sales tax revenues actually INCREASED in January compared to the same month last year ($478,186 in 2009 vs. $470,363 in 2008). It is only a $7,823 increase, but we can celebrate small victories. The revenues reflect sales in October and November and the increase is due to improved car sales. The last increase was in June 2008.
We know the increase is in car sales because our ½-cent sales tax – which does not include car sales – was down slightly compared to last year ($135,255 in 2009 vs. $137,224 in 2008).
And now for the bad news. Despite the small increase in January sales tax, we anticipate overall sales tax revenues to be down about $500,000 from last year and state income tax also to be down about $500,000. As a result, we will be starting about $1 million below our current year’s budget as we begin to assemble the FY2010-11 annual budget.
The state’s budget situation is far worse. Their current budget deficit is estimated to be around $13 billion! Here is a recent article describing how the State of Illinois is near insolvency.
Depending on whom you listen to, the economy is either on its way to recovery or will descend into another Great Depression. It is extremely difficult to budget in this kind of uncertainty, but our budget cycle requires us to prepare for our next fiscal year beginning May 1, 2010. We will estimate tax revenues the best we can. Staff will develop a proposed budget in February and the City Council will begin deliberating the budget in March. More to come!
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