The $9.41 million FY 2012 General Fund budget posted for a first reading June 16 by the Fayetteville City Council represents a smaller budget beginning in August and takes into account a projected 6 percent drop in the local tax digest. Expected to be adopted on July 21, the budget continues the city’s longtime cost-cutting measures.
The good news in the budget is the anticipation that sales tax revenues will increase slightly next year. The bad news is that the continuing local recession is expected to trim another 6 percent off the city’s tax digest numbers.
In its wake, city Finance Director Lynn Robinson recommended a $9.41 million budget that includes a decrease of $169,000 over the current budget. The FY 2012 budget continues the longtime hiring freeze and other measures put in place beginning in 2007.
Projections on the revenue side of the $9.41 million budget show a 6 percent decrease in the tax digest, a 1 percent increase in local option sales tax receipts, a potential 2 percent increase in business taxes and no increase in franchise taxes, license and permits. The city’s tax digest decreased 8.99 percent in 2010.
The largest portion of the expenditures side of the budget is public safety at 67 percent followed by public works at 10 percent, general government at 10 percent, judicial at 7 percent and housing and development at 5 percent.
As for revenues, the largest slice of the pie is sales taxes at 23 percent followed by property taxes at 22 percent, business taxes at 16 percent and fines and forfeitures and franchise fees at 14 percent each.
The number of city employees on the payroll continues to decrease. Full-time equivalent positions in 2008 totaled 163 compared to the 136 positions requested for 2012, a difference of 17 percent.
The council could have to roll-up the millage rate again this year to offset the decrease in the tax digest. That means the tax rate could go up in order to bring in the same amount of money that a lower rate produced in better economic times.
Fayetteville’s cost-saving efforts go back nearly half a decade when city finance staff began recommending and the council approved various budget cuts in anticipation of what was soon determined to be a recession.
The council’s July 7 meeting has been canceled. The second reading and likely adoption of the budget will be July 21.
