Communities tightening belts

Communities tightening belts
Municipalities across the state are “tightening their belts” as they assess the upcoming fiscal year budgets. Pending a main move by Tennessee Gov. Phil Bredesen and the General Assembly on Monday, local cities cite their concern with recent announcements of job cuts as well as shrinking revenues.
Martin City Recorder Chris Mathis agreed that not only on a state level, but a local level as well, sales tax revenues have taken a hit over the last fiscal year. Couple that with an ever-increasing rise in fuel costs and the City of Martin is “in for a belt-tightening this year.”
While the city does not pay gas taxes on fuel purchases for municipal vehicles, since last May, the cost of a gallon of unleaded gasoline has jumped by 14 cents per gallon from $2.70 to $2.84. The price of one gallon of diesel has increased by more than twice that number from $3.10 to $3.42 per gallon.
“We hadn’t considered the impact of the closing of Gordon Food Services until we started see a decline a local-option sales taxes. The company had sold items to the public that were taxed and now that Gordon is gone, we’re looking at a decrease in revenue,” Mathis explained.
The city recorder said sales were lower “all over” the past year. When considering the fuel usage for each department, some have come in under budget while others have reportedly been over budget. Mathis said money between the departments can be “moved around” between the departments other than sewer, gas and water.
Many cities across the state are anxiously waiting for news from capital hill before making any 2008-09 fiscal year budget decisions.
Reports out of Nashville cite the State will attempt to shed 2,011 jobs or at least 5 percent of the executive branch across the state. Bredesen announced his intent to shed $468 million from next year’s spending plan due to a softening economy.
Education will take a hit as well with the “revised spending plan” with pre-kindergarten education expected to receive no new funding for the next fiscal year. While basic education won’t face any budget cuts, higher education will give up $55 million or about five percent of the school’s state funds.
Mathis said the city is apprehensive about the state budget and what it could mean for local municipalities. He said state-shared revenue could take a hit, with the anticipation of no new money coming from the state for additional revenue.
Decreased consumer spending has taken its toll on the City of Dresden as well as it looks to increase property taxes by 25 cents.
“Overall, the costs of operating and maintaining things such as street lights, have gone up. Every year, it’s going to cost a little more,” Dresden Finance Director Melanie Bynum explained.
“We have to look at the long-term solutions for our citizens. We cannot operate on a deficit budget,” she added.
While the city of Dresden has not had a property tax increase in at least 10 years, an uncontrollable source of revenue such as sales taxes generated for the city are declining. Bynum said the city does not anticipate an increase in state-share revenue for Dresden for the upcoming fiscal year. The proposed property tax increase for Dresden residents passed on its first reading at the May monthly meeting.
A public hearing and a second reading are scheduled for the June monthly meeting of the Board of Mayor and Aldermen.
“We try to look at how to create revenue and we have to take several factors into consideration,” Mathis said.
While he did not provide any future plans for the city’s upcoming budget, Mathis described four options for budget balancing.
“We can raise revenues by raising taxes. We can reduce expenditures, which cuts into labor. We can do nothing, which can cut into our reserve funds. Or we can do a combination of all three of the options,” Martin’s city recorder added.
Bredesen announced the state’s upcoming fiscal year budget Monday night.
WCP 5.15.08

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