30 March 2000
 
City 2001 Budget Starts With Call For Higher Taxes
 

News & Editorial

By Jon A. Brake

You may think you have allergies. Burning, itching eyes, running nose, the works. But, it is not from something in
the air. What you are feeling is caused by the City of Manhattan trying to pull the wool over your eyes.

The City held the first Work Session on the 2001 Budget Tuesday night. It looks bad, very bad.

"Non-property tax revenues are not growing as fast as expenditures or as anticipated."

"In 2001 and 2001, the City will experience a 6.5% reduction of state aid in Local Advalorem Reduction Funds
and State Revenue Sharing Funds proposed by the Governor. In 2000 and 2001 will mean a loss of about
$132,000."

City Director of Finance Curt Wood did a good job in telling the Commission that the City would have to raise
taxes if they wanted to keep spending the way they have for the past years.

With this Commission the news was not good. This Commission has big plans for Manhattan. Those plans call for
a lot of money to be spent. The Mayor said that the City needs to be prepared for higher taxes or cut services.

Donít you believe it. In 1999 the City of Manhattan received more money and spent more money than any year
in history. They took in $58.9 million. That is $200,000 more that the Budget called for.

The Citizens of Manhattan had better get involved with this Budget early. The City of Manhattan Budget in 1991
was $26 million. By 1999 it hit $58.7 million.

Here is what the Commission was told Tuesday night:

* 1999 actual expenditures for all Funds were about $3.2 million below budgeted 1999 expenditures (favorable).

*1999 actual General Fund expenditures were about $105,000 less than budgeted (favorable)

*1999 actual total revenues for all funds were about $189,000 more than budgeted in 1999 (favorable).

*However, in the General Fund actual 1999 revenues were $614,000 less than budgeted. Adjusting for timing of
payments for motor vehicle taxes and a franchise payment, the 1999 shortfall in General Fund revenue was
$446,000 (not favorable).

*1999 revenues for all Budgeted Funds, not including cash carryover, miscellaneous revenues, or inter-fund
transfers, increased by $360,559 or 1.09%.

*We had budgeted a 1.5% increase in 1999 over actual 1998 receipts.

*Consequently, we experienced an overall shortfall of $146,985 in 1999 actual revenues from all Budgeted funds
as compared to the revised 1999 Budget.

*In other words, revised 1999 revenue estimates for state shared revenue, investment income, franchise fees,
utility revenue, gasoline tax, and airport fees were too optimistic.

*The original 2000 revenue projections for each Fund were prepared using 1999 revised budgeted numbers as a
foundation.

*Consequently, some of our 2000 original revenue estimates are too high, and will need to be revised downward
in the revised 2000 budget. This will also mean lower 2001 non-property tax revenue estimates than originally
forecasted.