Peachtree City's cash reserves,

a focal point of this year's budgeting process, may be needed to help

balance this year's budget, too.

With the stumbling economy

predicted to shrink the city's sales tax revenues, Peachtree City staff

will take yet another look at the recently adopted budget for more cuts.

As the issue was discussed at Thursday night's council meeting, City Manager

Jim Basinger said spending cuts could come from the public improvement

program and the cash reserve fund.

City staff will look at plans

for cuts to equal a 5 to 20 percent shortfall in sales tax revenues, which

accounts for just over half of the city's budget. But if the sales tax

money shrinks by 20 percent, that only represents 8 percent of the city's

budget, noted Mayor Bob Lenox.

The cash reserve was used to

balance the budget last year, causing a $1.4 million reduction largely

due to a package giving employee raises. Doing so allowed council to postpone

a property tax rate increase for one year, further adding to the city's

financial crunch this year.

Councilman Dan Tennant suggested

the city stave off a property tax increase with a 10 percent across the

board cut in departmental budgets, excluding public safety.

But other council members indicated

they didn't want to reduce the level of service the city is providing.

Tennant admitted such a move might lead to reducing the city's staff levels.

Lenox said he felt a 10 percent

cut would be extreme. He added that he doesn't expect the downswing in

the economy to last long.

Councilwoman Annie McMenamin,

who brought up the matter, suggested that cuts could also be made in the

city's planned equipment purchases. She also noted that Basinger has directed

that only essential department purchases be made until the full impact

of the economic slowdown on this year's budget can be assessed.

Council voted 3-2 to adopt

a tax rate of 4.315 mills, up from 3.84 the previous two years. Tennant

and Councilman Steve Rapson voted against it. Rapson previously said he

would vote against the budget because he doesn't agree property taxes

need to be increased.

The increase will cost approximately

$40 a year for homeowners with homes valued at $200,000; Lenox noted that

persons owning such homes paid $28 a month for city services through property

taxes, which is less than residents pay for cable TV, cellular phones

and automobile insurance, he added.

Back

to News Home Page |