With the “Form B” budget discussions now complete, Council member Sally Bagshaw, the budget chair, is hard at work assembling her initial “balancing package” of changes to the Mayor’s proposed budget. Her job is to cram as many of the Council’s wish-list items in, to match whatever additional revenues she can scrape together. The final piece of the puzzle is an updated projection from the City Budget Office on 2019 and 2020 revenues, which was delivered at the end of the week. Usually it delivers at least a few million dollars of extra revenues to spend; this year, not so much.
For the remainder of 2019, the city projects $358,000 less general fund revenues than it did in August, offset by an increase of $202,000 in Transit Benefit District funds, for a net decrease of $156,000 — a rounding error in the city budget. Sales tax revenues increased; B&O tax, parking meter revenues, and Short-term Rental (i.e. AirBnB) tax fell short.
For 2020, the city projects an increase in general fund revenues of $1.2 million, and an additional increase in restricted-use dollars of $115,000. Once again, sales tax revenues increased, and the city corrected a mistake in the Mayor’s original 2020 proposed budget that realizes another $1.3 million from the IT Fund (which cross-charges departments for IT services, and occasionally refunds money back to those departments when costs come in lower than expected). Unfortunately, that is offset by decreases in projected revenues from:
- the car share street use tax, since Lime closed its car-share service here;
- parking meter revenues, because parking space occupancy is trenidng lower;
- the AirBnB tax, which the city attributes to low compliance;
- the new heating oil tax. At Council member Pacheco’s request, and acknowledging the city’s data on existing heating-oil furnaces is faulty, the city re-evaluated its revenue projections and adjusted them down;
- Property tax, due to lower new construction values.
Here’s the full memo from the Budget Office explaining the revenue update.
Overall, the changes are minimal, and certainly smaller than past years. The general expectation is that the city budgets revenues conservatively and the November update will be a last-minute windfall of at least several million dollars. This year it’s essentially flat, and that makes Bagshaw’s job harder in assembling her balancing package. It also creates more pressure to redirect revenues from the Mercer Megablock sale and the TNC tax to Council members’ priorities.