Higher property values and high sales tax revenues are supporting a city budget with more spending and a surplus, Chief Financial Officer James Brigham told Columbus City Council at a Tuesday night budget hearing.
However, a small tax increase may be on the table due to increased state retirement contributions.
Brigham is projecting revenues of $26.7 million in Fiscal Year 2024, which begins Oct. 1. This is an increase of just north of $2 million over FY 2023, but the city is on track to take in more revenue than it budgeted.
Sales tax collections are especially strong, he said.
“We budgeted $10.5 million (in collections), and we are already at $10.4 million,” Brigham said. “I anticipate another $900,000 in collections in September, which should put us over $11 million.”
Sales tax revenues are projected to be around $11.4 million at the end of this fiscal year, and Brigham said he budgeted to collect that figure in the FY 2024 budget.
Ad valorem tax collections will go up as well, Brigham said. The value of a mill has increased from $194,000 to $202,000.
Projected expenditures are also up $1.4 million over last year, he said, totaling about $26 million. The city is projecting an increase of $300,000 for Public Employees Retirement System matching funds and for new employees; an increase of $400,000 from the new trash collection contract; increased costs at the police and fire departments of about $600,000; and information technology improvements of about $125,000.
As of now the city is projecting a surplus of about $700,000, Brigham said.
“I am asking for some guidance as to what else you would add to the expenditure budget,” Brigham said. “I think it’s reasonable to bring the expenditures up to about $26.5 million.”
Brigham asked the council to leave around $200,000 in surplus funds as a cushion.
“If for some reason there’s a problem with revenue, we want to have a little gap between the revenue and the expenditure budget,” Brigham said. “The last thing we want to do is have to amend the budget and then make budget cuts.”
Ward 3 Councilman Rusty Greene asked if $200,000 was enough.
“I think it is, because the revenue budget is conservative,” Brigham said. “If the economy drops, then sales tax will drop. There’s no way to forecast that.”
The projected budget does not include raises, Brigham said.
“If you’re looking at allocating from that (surplus to fund raises) … I will tell you that we solicited requests from the departments and they totaled a little over $2.6 million (in additional general expenses),” Brigham said. “I shoehorned about $1 million into the budget, and that leaves $1.6 million in unfunded requests.”
The city’s state-required contribution to the fireman and police retirement fund is going up by about $60,000, Brigham said.
“Last year was funded by 5.09 mills,” he said. “We got a letter from PERS saying it needs to be 5.38 mills. That .29 mills comes to about $60,000.”
A mill measures ad valorem taxes that are collected on personal and real property. For example, A 0.29-mill increase would raise a homeowner’s tax bill by $2.90 per every $100,000 of appraised value.
To keep the tax levy flat at 54.11 mills, Brigham recommended paying the $60,000 out of the surplus rather than raising taxes.
The council will meet again at 6 p.m. Tuesday at City Hall to set the millage levy for the next fiscal year. The council is set to approve the FY 2024 budget Sept. 5.
The Columbus Municipal School District — whose budget request goes to the city, which levies the taxes to collect it — is not raising taxes, either. It may see as much as a 0.75-mill decrease due to debt being paid down.
Brian Jones is the local government reporter for Columbus and Lowndes County.
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