College Station city officials say they are expecting another round of budget cuts this fall as they prepare for the upcoming fiscal year. Such a move would make the fourth straight year of significant reductions since the Great Recession slowed revenue growth and forced belt tightening in municipal governments across the country.
In all, the city has slashed more than $7 million from its budget since the 2009 fiscal year. Those cuts include the elimination of 44 fulltime positions in the past two years. College Station’s fiscal year runs from October to September.
City officials didn’t say how much they will propose cutting this year. That will depend on policy decisions by the City Council and how final tax revenue numbers turn out. Last year, the city projected about $1 million in reductions would be needed this summer, but the accuracy of that number now is unclear.
“We’ll know more in the next few months,” Chief Financial Officer Jeff Kersten said.
Kersten said Monday that he expects property tax values to remain relatively flat this year, an expectation that Brazos County Chief Appraiser Mark Price also has expressed recently. Property taxes make up about one-fourth of the city’s general fund budget.
Sales tax revenues have been more promising. So far this year, tax receipts have jumped more than 5.5 percent compared to last year. That is more that double the growth the city projected before the year began.
Still, city officials said they are remaining cautious for next year and are so far projecting 2 percent growth for the 2013 fiscal year. Sales tax makes up 37.5 percent of general fund revenues.
But new expenses may cancel out much of that growth. The city expects to open a new fire station on University Drive next year, which will require the addition of 18 new jobs to the budget. The city also plans to set aside $350,000 to pay for improvements to the surfaces of city streets.
Kersten also said cuts may need to be made to accommodate the city’s effort to wean itself off utility transfers. Prior to this year, the city added a 10.5 percent charge to residents’ electric bills. Most of that extra money went into the city’s general fund, which pays park maintenance, city planners, police operations and most other general city business.
But those transfers, which were budgeted to raise $5.45 million this year, have been controversial in recent years, with some City Council members calling them a “hidden tax.”
The city cut about $2 million of those transfers in the 2011 and 2012 budgets. Budget officials plan to cut an additional $1 million from those transfers next year.
It is unclear where those cuts will be made. One area that will be looked at closely is the pay and benefits of city employees. City staff plans to recommend that the council convene a subcommittee to review employee benefits and pay. That doesn’t necessarily mean that is the area that will be targeted for cuts, Kersten said, but it does make up a large part of the city’s budget.
The City Council saw a presentation on the upcoming budget process at its regular meeting Monday, but didn’t provide any feedback. City staff will prepare the budget over the next few months with plans to present a proposal to the council in late July or early August. The council will then convene workshops to review and revise that proposal during August and September.
Adoption of the budget is scheduled for September 13.