Springfield City Council has begun reviewing the proposed budget for the 2021 Fiscal Year.
City manager Jason Gage and Finance Director David Holtmann presented the Council with a look at the general fund projections for the rest of this fiscal year, and revenue projections for 2021.
“Given the current economic situation we are experiencing with the COVID-19 pandemic, we are anticipating sales tax to decline approximately 20% for the remainder of the fiscal year (sales tax collections received in May, June, July, and August),” Gage said. “My first priority in developing the proposed FY2021 budget is to the greatest degree possible maintain the City’s labor and financial resource capacity to continue to provide essential municipal services to our citizenry as we come out of the COVID-19 pandemic.”
Gage has taken action to cut city costs in anticipation of a significant drop in sales tax revenues:
- Hiring freeze for “non-essential” employees, subject to City Manager review: $218,000
- Freeze for “non-essential” work travel and training: $191,000
- Reduction in FY 2020 General Fund unencumbered capital expense: $457,000
- Reduction in workers’ compensation rate transfer from the General Fund by 50%: $267,000.
All the reductions came in areas that are funded by General Fund revenue such as sales and use tax.
The city had budgeted for a 1.5% increase in sales tax revenue over the fiscal year, and the actual after April was .9%.
Gage had a dismal outlook for the city’s general fund in FY2021, which funds most police & fire operations, public works, and building development services.
“Moving into FY2021, we anticipate a modest staggered improvement of retail activities resulting in sales tax projections 13% lower in the first quarter; 5% lower in the second quarter; 3% lower in the third quarter, and flat revenue in the fourth and final quarter,” Gage said.
The reduction will be about $2.9 million less in the budget for sales tax revenue in FY2021. The total revenue in FY2021 is estimated to be $5.2 million less than the current fiscal year.
Here is the slideshow from today presentation to Council:FY21-Budget-Workshop-May-5th-FINAL
Here is the proposed budget:City-of-Springfield-2020-21-Proposed-Budget-ELECTRONIC