Budget concerns arise amid shrinking revenues and the rising cost of living.
Fiscal Year 2021 Budget Prep Recap
On Sept. 8, 2020, the city council adopted the Jefferson City budget for the fiscal year 2021, which began Nov. 1. While I am satisfied with what we accomplished this year, all things considered, last summer’s budget process left me with lingering feelings of frustration and concern.
Projected Decrease in Revenue
One of our first steps was adopting revenue projections developed by the Jefferson City Finance Department, which anticipates a 0.26% drop in general fund revenues in fiscal year 2021. This means that before considering any new spending items, we were starting with $85,000 fewer dollars than were available in last year’s budget. This projection was based on continued decreases in gas and electric utility tax, telephone and cell utility tax, and court fine revenues. Sales tax revenue growth looks to remain extremely limited as well.
Not Much Wiggle Room
Starting out in this hole, we had to scramble for every penny we could find to meet basic core services needs. More than $3.2 million in proposed spending was detailed in the departments’ pink sheets. This included replacing 16 police department vehicles, purchasing essential radio equipment for the Jefferson City Fire Department, and refurbishing several city facilities, among many other requested items. Despite our collective best efforts, we were only able to cover a handful of police vehicles and some code enforcement software.
Fortunately, we were able to make some additional progress outside of the budget process and look forward to achieving more in the near future. Almost $350,000, which was still budgeted for construction of the now-finished JCFD Fire Station 2, was reappropriated from our fund balance within the FY20 budget to renovate JCFD Fire Station 4 on Ellis Boulevard. We are also awaiting reimbursement of nearly $1.6 million from FEMA for expenditures related to the 2019 tornado, which will help us catch up on some equipment and infrastructure obligations and replenish the fund balance. But that reimbursement will be a one-time infusion, and the CARES Act funding that is currently supplementing some city operations will end in a few years. We must be better prepared and funded for the future.
Insufficient Funding for City Staff Salaries
This year, we received confirmation that the 1% to 2% annual cost-of-living raises we try to build into salary budgets (set at 2% for FY21) have never really kept up with inflation. We also discussed salary compression issues affecting city employees across all departments, including our police department, where our salary range hurts our ability to compete with neighboring law enforcement agencies for good, well-trained officers. If we can’t find solutions to these problems, we risk losing experienced professionals and the high-quality services they provide. It will be beyond difficult to find fixes with shrinking revenues.
If we are going to make progress here, we need a broad coalition committed to bringing our revenue portfolio into this century (see my previous article on use tax) and securing available revenue streams devoted to the city’s public safety needs. Simply expressing frustration and concern won’t cut it anymore.