Despite a projected revenue downturn amid the COVID-19 pandemic, the city of Columbus is proposing a budget for Fiscal Year 2021 that would allow the millage rate to stay the same and leave the city with over $8,000 of surplus.
The FY 2021 budget — presented to Mayor Robert Smith and council members during a special-call meeting Friday afternoon — projects approximately $22.95 million in revenue and $22.94 million in spending, which would leave the city with a surplus of $8,286.79, documents show.
The projected revenue for FY 2021 is roughly $976,000 less than the $23.9 million budgeted for FY 2020, which is largely due to an estimated 11-percent drop in sales tax revenue, documents show. The city expects to collect $8.6 million in sales tax for the upcoming fiscal year, which is $1 million less than the $9.6 million budgeted for FY 2020.
That projection signals the impact of the pandemic on the city’s finances, some council members told The Dispatch.
“We’ve lost retail stores. Some of that is because of the pandemic,” Ward 6 Councilman Bill Gavin said. “Anytime you lose sales tax dollars, it really does hurt the city.”
Ward 3 Councilman Charlie Box told The Dispatch that before the pandemic hit, the city’s sales tax revenue had been growing.
“Our sales tax has been surging for the last two or three years,” he said. “So that (downfall) is definitely pandemic-related.”
Department cuts and increases
To accommodate a smaller revenue than the current fiscal year, the city hopes to cut $408,000 in spending for the upcoming fiscal year. Compared to FY 2020, many areas — including the police, administrative and finance and information technology departments — will see their budgeted expenses shrink if the proposed budget is approved. Many of those departments are seeing reduced spending in personnel, supplies and capital improvement projects.
The police department, for example, is allocated $5.1 million for FY 2021, which is a $432,345 decrease from the current fiscal year, documents show. Chief Fred Shelton told The Dispatch he foresees reduced outdoor events in the upcoming fiscal year, which would not require as many officers in the field or as much overtime pay.
The city also reduced its budgeted spending on outside transfers — which includes money used to match grants — from $2.1 million to roughly $191,800, which likely means that the city will pursue fewer grants in the upcoming fiscal year, Chief Operations Officer David Armstrong told The Dispatch.
But certain areas could see increased spending in FY 2021. For example, several city departments will witness more money going to outsourcing services, such as maintenance, utilities and election expenses, according to the proposed budget. Although its overall budget shrank, the administrative and finance department is allocated $1.6 million in contractual services for FY 2021, marking a $661,427 increase in that category from the current fiscal year.
The city is also increasing its projected expense on “care and maintenance” — which Armstrong said includes repairs of traffic signals and stop signs — by almost 80 percent in FY 2021, documents show. The estimated spending on that category for the upcoming fiscal year is roughly $923,000.
“There are a lot of traffic signals that we are responsible for that, honestly, we probably should have put in this year’s budget but we didn’t,” he said. “We are going to have to do that this year. We can’t put it off.”
Armstrong told The Dispatch he “under-budgeted” department expenses in FY 2020, which caused a seemingly big jump in proposed spending this year. If he had not done that, Armstrong said the city would have seen a huge millage increase to meet the amount of money it needed to pay toward general obligation bond debt that year. The city increased its property tax rate — calculated in mills — from 47.59 to 51.24 last year.
“I really cut more than I should have last year,” he said. “Had I not cut it drastically as I did, we would have been looking at at least a 5-mill increase.”
Despite having less money to work with for the upcoming fiscal year, Armstrong told The Dispatch the city’s financial situation is in better shape than he had expected.
“It just worked out that way. …I thought we would be really lopsided,” he said. “I just thought, really, that our expenses would be a whole lot more than what our projected revenue is.”
Based on the overall projections, Armstrong said the city does not have to raise its millage rate to create more revenue for the upcoming year.
Gavin said he favors keeping the millage rate at the same level.
“I think it’s a good idea,” Gavin said. “It’s (also) encouraging to see things being cut to help balance that budget where it doesn’t throw us into a tailspin.”
Smith and other council members could not be reached for comment by press time.
A public hearing on the FY 2021 budget will be held at 5 p.m. on Sept. 8 at the Columbus Municipal Complex. The city will adopt the millage rate during that meeting and adopt the budget Sept. 15.
Yue Stella Yu was previously a reporter for The Dispatch.
You can help your community
Quality, in-depth journalism is essential to a healthy community. The Dispatch brings you the most complete reporting and insightful commentary in the Golden Triangle, but we need your help to continue our efforts. In the past week, our reporters have posted 37 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.