Lawrence City Commission to receive update on revenue projections, discuss budget priorities for next year
photo by: Mike Yoder
City leaders will soon receive an update on revenue projections for this year and begin discussions regarding their priorities for the upcoming 2022 budget.
As part of its study session Tuesday, the Lawrence City Commission will receive 2021 revenue projections on the city’s major revenue sources and direct staff regarding five key policy questions that will affect the 2022 budget.
Partially because of financial uncertainty associated with the coronavirus pandemic, the commission approved a “placeholder” budget for 2021 with the expectation of making quarterly budget adjustments throughout the year. As part of the meeting, city staff will update the commission on revenue projects for the city’s major sources of revenue, such as property taxes and sales taxes, as well as other revenue streams that have been affected by the pandemic.
When it comes to property tax, staff state that collections have been “relatively stable,” with the first installment received in January only .15% lower than the 2021 budget, according to a city staff presentation. The second installment will be known in July. For sales tax, collections are currently 2-3% lower than budgeted. Collections for use tax are 42-54% higher than budgeted, but staff note that use tax, which is collected on sales or services made outside the city but with Lawrence residents or businesses as recipients, is a much smaller portion of the revenue stream.
Regarding other revenue sources, revenue from franchise fees is currently 8-20% lower than budgeted; transient guest tax is 70% lower; gasoline tax is 11.6% lower; and liquor tax is 64.1% lower. However, the city has received various state and federal grants to help address the financial impacts of the pandemic. That includes approximately $9 million that the city will receive this year, and the presentation states that the city will continue to review federal funding availability.
When it comes to revenue projections for next year’s budget, the presentation states that there are still a number of unknowns to consider, and that each month will provide additional information that can be used for financial forecasts. As part of the study session, finance staff is looking for general direction from commissioners regarding their spending priorities for the 2022 budget.
The presentation states that ideally all city spending in next year’s budget will be closely connected to the goals in the commission’s recently updated strategic plan. The plan focuses on outcomes related to five areas: arts and culture, strong and welcoming neighborhoods, safety and security, prosperity and economic security, and functional and efficient infrastructure.
Ahead of the drafting of the city manager’s recommended budget for next year, finance staff is looking for direction on five key policy questions. Those include programs or projects commissioners want to ensure are included in the proposed budget; what parameters they want to see on revenue such as taxes and fees; whether they want to consider a market-competitive staff compensation plan; how much investment, by percentage, they would like to see in each of the five areas of the strategic plan; and whether they support a prioritization plan for federal coronavirus relief and whether the city should seek grants for infrastructure.
The City Commission will convene virtually for its regular meeting at 5:45 p.m. Tuesday with limited staff in place at City Hall, 6 E. Sixth St. The city has asked that residents participate in the meeting virtually if they are able to do so. A link to register for the Zoom meeting and directions to submit written public comment are included in the agenda that is available on the city’s website, lawrenceks.org.