Smart Living Germantown: COVID-19 brings steep budget cuts, but no tax increase or dip in police funding
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Germantown will not pursue any tax increases this year, but the city will have to slash spending due to revenue losses from the COVID-19 pandemic, city officials said during a virtual budget work session Wednesday.
Those cuts include capital improvement projects like road paving, as well as general fund expenses, including raises for non-public safety government personnel. Discretionary spending will also be curtailed, but the budgets for the police and fire departments will not be cut and they will receive step raises, city administrator Patrick Lawton said.
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The fiscal year began July 1, but the board of mayor and aldermen in May adopted a continuing resolution extending the previous fiscal year's budget into the current fiscal year, giving city officials more time to figure out exactly how drastic pandemic-induced revenue losses would be.
“This pause, if you will, gave us the opportunity to really analyze what’s happening, rather than making knee-jerk, draconian cuts,” Lawton said. “You’re gonna see cuts to the budget, absolutely, but they’re going to be based on facts and analysis.”
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City staff projected about $56 million in revenue for the fiscal year, a 4.5% drop from what was expected in the fiscal year that just ended.
Budget and Financial Services Director Adrienne Royals said the city is projecting decreased local option sales tax, state-shared sales tax and hotel and motel room occupancy tax revenues.
While sales tax figures took big hits this spring, April 2020 sales tax revenue was down 32% from April 2019. Royals said sales tax revenue from the months preceding the pandemic exceeded projections, so the city ended the last fiscal year at budget.
Property tax revenue — the city’s main revenue source — will not be impacted by the pandemic.
The infrastructure replacement program budget will be reduced by 56%, Royals said. The 11 IRP projects that will be completed include purchasing four new police cars, police radio system upgrades, police security cameras, police in-car video systems and new fire alarms at the Germantown Performing Arts Center.
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Capital improvements program coordinator Emily Rozar said the CIP budget for the fiscal year has also been cut significantly and that many projects have been deferred to future budget cycles. Among the projects included in the $4.8 million capital improvements budget are ADA compliance updates, several road projects — including finishing work on Forest Hill-Irene Road — an extension of the Greenway to Collierville and drainage improvements.
Special revenue funds will be discussed later this month. A public hearing on the budget will take place during a regularly scheduled virtual board meeting on Aug. 10. The budget is expected to be adopted at a meeting on Aug. 24.
Corinne Kennedy is a reporter for The Commercial Appeal. She can be reached via email at Corinne.Kennedy@CommercialAppeal.com or on Twitter @CorinneSKennedy
This article originally appeared on Memphis Commercial Appeal:
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