Mayor Don Wesely presents a budget forecast to the City Council today that projects a balanced budget with no property tax increase next year and adds 12 police officers.
"I am proud to report that the City’s finances are healthy, and the City is not facing a budget deficit next year because of prudent spending this last year. The controls that I placed on City spending worked and have positioned the City in a solid financial position to add police next year without a property tax increase," Wesely said.
In releasing budget projections today, Mayor Wesely announced that his measures to hold the line on City spending also improved by $2 million the preliminary general fund balance for the fiscal year that ended August 31.
"We are in a much better financial condition this year. Last year at this time, due to the slow economy, the City was looking at how to close a projected $5.6 million shortfall," said Wesely. "We took decisive action to cut spending immediately, and we took a very conservative approach to the current year’s budget. These actions helped preserve and improve the City’s general fund balance during a time of revenue shortfalls.
"We must continue to be fiscally prudent, but we have some very positive signs that our local economy is gaining strength. We have not raised the City’s property tax rate for the last four years, and I am very pleased that our projections indicate we will be able to continue holding the line on the property tax rate."
The City’s Budget Office is projecting a tax-funded budget of about $118.2 million for the 2003-2004 fiscal year, which begins September 1, 2003. That’s an increase of 4.6 percent over the budget for the current fiscal year. The 12 additional police officers would cost $591,549 in the next fiscal year, but $308,334 of that would be covered by federal grants. The projections assume a 4.5 percent increase in gross sales tax collections for the rest of this fiscal year and the 2003-2004 fiscal year.
Net sales tax revenue for December is about $3.9 million, 6.7 percent above last year. It was the seventh consecutive month of growth in the gross and net sales tax revenues. In the first four months of this fiscal year, net sales tax collections are up 15 percent. Sales tax revenues fund about 42 percent of the City’s tax-supported budget.
Wesely said another positive sign is the 91 percent increase in the value of building permits issued in the first three months of the fiscal year. Lincoln also has the fourth lowest unemployment rate in the country among cities of the same size.
Wesely said the City’s current financial condition is much more manageable than it was a year ago when City sales tax revenues were below projections. To close the shortfall, Wesely imposed a freeze on unspent funds, postponed many Capital Improvement Projects in the general fund, delayed some equipment purchases, denied discretionary travel by employees, and implemented a hiring freeze with a review process to fill only essential positions.