Archive for Monday, April 27, 2009

Sales tax drop adds to city’s budget concerns

Sales tax collections for the city are off for the first three months of the year, another sign of the softening economy in Lawrence.

April 27, 2009

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The city’s finances are starting to show new signs of a weakening economy.

After holding up well for most of 2008, sales tax collections in the first quarter of 2009 have fallen by about 2.5 percent from the same period a year ago, according to the city’s most recent financial report.

But the latest numbers aren’t yet a sign that the city will have to make a series of midyear budget cuts to make the city’s books balance.

“I’m pretty optimistic, based on what we see right now, that we’re not going to need to make any mid-course corrections,” Mayor Rob Chestnut said. “The main reason is we’re being very vigilant in our spending.”

In the past two years, the city has made midyear adjustments that have affected social service funding and other city services.

The latest report shows that the city is in a better position this year to deal with revenue shortfalls because city departments have been spending less than their budgets allow. Through the first quarter, overall general fund spending totaled $11.7 million, down from $12.1 million in 2008.

“If we need to make midyear budget adjustments, we can do that,” City Manager Dave Corliss said. “But the good news is that we’re moving into 2009 in better shape than we had budgeted for.”

The city likely has at least one more budget bullet to dodge. Chestnut said city leaders are becoming increasingly concerned that the state may again consider keeping about $1 million in liquor tax revenues that currently are slated to be distributed to the city.

“That number is so large that if we lose it, we would need to look at second-half budget reductions,” Chestnut said.

Corliss’ office previously has proposed a series of cuts including elimination of school crossing guard funding and reductions to many parks and recreation services to deal with the shortfall. But whether city commissioners would approve those cuts or create a new list is uncertain. The cuts were criticized by some candidates during the recent City Commission elections.

In other news from the city’s financial report:

l Ridership on the city’s transit system is up, but that does not mean that the amount of money in buses’ fare boxes is growing. Despite an increase in ridership on the T of about 10 percent, fare box revenue actually declined by about 7 percent, or about $5,000, for the quarter. City staff members said that’s because much of the ridership increase has come from Kansas University students, who can ride the buses for free under a new city agreement with KU.

Ridership on the city’s paratransit system — which provides door-to-door service for the disabled — has decreased by about 2 percent. That decrease has helped lead to the overall decline in revenue, since paratransit fees are twice as high as regular fares for the T.

Comments

Chris Ogle 6 years, 3 months ago

What a surprise to read about decline in sales tax revenue, and public transpo in the same article. One may think they are related issues, in some way.. darn..... wonder why??

CLARKKENT 6 years, 3 months ago

EVER SINCE THE LAST SALES TAX INCREASE, THERE ARE SEVERAL PEOPLE DOING MOST OF OUR SHOPPING OUT OF LAWRENCE. OUR NEW FORD SAVED US QUITE A BIT, OUT OF LAWRENCE.

LET THOSE THAT VOTED FOR THE INCREASE MAKE UP THE SHORTFALL.

SettingTheRecordStraight 6 years, 3 months ago

The city can start by cutting its losses on the emp-T. Then eliminate the $9 million (gasp!) we spend annually on parks and recreation. Finally, eviscerate the Lawrence Arts Center budget.

Those three cuts would be a small, but good starting place.

OzChicklet 6 years, 3 months ago

SettingTheRecordStraight (Anonymous) says…

The city can start by cutting its losses on the emp-T. Then eliminate the $9 million (gasp!) we spend annually on parks and recreation. Finally, eviscerate the Lawrence Arts Center budget.

Those three cuts would be a small, but good starting place.


You aren't serious about the parks and rec, and the Art Center, are you? If you are, all I can say is WOW...unbelievable...

BigPrune 6 years, 3 months ago

The City of Lawrence hates retail dollars that's why they throw up barriers on any retail that is new. Not only that, they pass laws that make it impossible for reasonable people to put in retail businesses which in turn causes vacancies, which the "no growthers" use as an excuse to prevent any new retail from coming to town.

The CIty has done it to themselves, and they don't give a sh*t. There are too many "Progressives" or "no growthers" still pulling the strings. The first person to eliminate is Corliss. He is a "Progressive" "no growther." The only difference between him and the other "Progressives" is: he bathes with soap, wears a suit and combs his hair.

SettingTheRecordStraight 6 years, 3 months ago

Chick,

I suppose you support the redistribution of wealth to support those pet projects enjoyed by only the few among us.

Tell me, what right or responsibility does the government have being involved in the softball league business? And where in the Constitution does the government derive a right to take my income in order to fund an inessential "service" such as promoting artwork?

Lower taxes. Less government. Now.

notajayhawk 6 years, 3 months ago

Wait - you mean that continued emp-T bus service being dependent on passing a sales tax increase was a mistake? And you mean that without the KU students who are riding for free, ridership has actually declined, not increased? How could that be given the geniuses on these message boards that vehemently supported the sales tax?

(You can add my name, incidentally, to those who bought a car with our tax refund this year - just bought it in another county.)

HalsteadHawk 6 years, 3 months ago

"The city likely has at least one more budget bullet to dodge. Chestnut said city leaders are becoming increasingly concerned that the state may again consider keeping about $1 million in liquor tax revenues that currently are slated to be distributed to the city."

What, no honor among thieves? I'm Shocked!

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