City faces sales-tax shortfall
Budget officials worry about 2014
If only there were a crystal ball the city of Grand Junction could use to estimate what revenue will be in the coming year.
Instead, city budget officials often largely rely on their best guesses around this time of year to plan a budget for approval by city councilors in mid-December.
Unfortunately, so far this year, actual collected revenue in the first six months of year was lower than city budget projections.
The city had budgeted sales and use tax collections of $25.3 million through June but only pulled in $23.8 million. If the shortfall continues through the end of the year, the city will be down $2.2 million — compared to the same time last year.
The news is sobering as city councilors begin to draft budget projections for 2014, Councilor Marty Chazen said.
“I think we’re lucky,” he said, adding that the city budget was able to absorb the decreases this year. “Looking ahead to next year, I think we’re getting ourselves into a really tough budget cycle.”
City officials made up for some of that shortfall through nearly $500,000 in savings to salaries and benefits to employees and by earning an unexpected $411,000 on audits from some businesses.
They saved $75,000 by putting some technology improvements on hold and saved $250,000 by postponing road improvements at 28 1/4 and Patterson roads, to name a few savings.
In addition to a loss of projected revenue through sales taxes, the city missed out on $300,000 in traffic fines as the Grand Junction Police Department’s traffic unit disbanded in January. Budget balances were decreased $60,000 on overtime costs for staff and down an additional $127,000 for unexpected costs to replace a bomb robot for police, among other costs.
After all the unanticipated costs and savings shake out, the city may be looking at a nearly $350,000 hit by the year’s end.
Projecting the future and drafting budgets to reflect those future projections has been a challenge at least since 2009, when city sales and use taxes plummeted along with the tanking economy. At its lowest point, sales tax collections were down nearly 23 percent in the fall of 2009, compared to the previous year. The city generates dollars from other sources, but the health of sales and use taxes plays a big role in the city’s revenue stream.
Grand Junction started 2013 with a general fund balance of $29.3 million and expects to end the year with a $20.6 million balance. City officials had originally budgeted to end the year with a $19.3 million balance. Past councils had set the city’s general fund to remain at a $18.5 million minimum. The general fund represents a portion of the city’s budget. The city’s entire budget this year was set at $145.8 million.
“We’re going on the assumptions that revenues will be flat,” City Manager Rich Englehart said about how city officials will project for next year’s budget. “We’ve had a number of tough budget seasons. I can’t wait until we don’t have a tough budget season again.”