City, county deal with slipping sales tax revenues

Both the city of Springfield and Greene County continue to face declining sales tax revenues, but the two entities are in different stages of handling the situation.

The latest blow to city sales tax revenue came with the Oct. 9 receipt of its monthly check from the state Department of Revenue for the 1-cent general sales tax.

The October check, which reflects purchases made in July and August, totaled nearly $3 million, down 15 percent compared to October 2008. During fiscal 2010, which started in July, the city's sales tax revenue is down 11.1 percent to $12.2 million.

The October drop compounds funding shortages for which the city already is planning.

City Manager Greg Burris announced a plan in mid-September to cut nearly 10 percent in the general fund budget, due to sales tax shortages and the city's increased contribution this year to the pension fund.

Among the cuts are four layoffs, a continuation of the citywide hiring freeze, mandatory furloughs for city management in all departments and a 10 percent spending reduction in most departments effective Oct. 1.

Deputy City Manager Evelyn Honea said city staff is not considering additional cuts for now; she noted that the October drop of roughly $500,000 should be covered by more than $400,000 the city is saving through job vacancies.

"We have encouraged the council to go through the quarter and actually have in hand the receipts for three months of sales tax before we start talking about any more drastic measures," Honea said. "The check for December will likely come in around the 7th or 8th of that month, and once we analyze where we are at that time, Greg (Burris) will meet with council at that point to discuss what actions are needed."

On the county level, sales tax revenue is down 9.1 percent to $8.1 million through the first nine months of its fiscal year, which follows the calendar year. County officials had expected to be off-budget by 12 percent.

With $2.5 million sliced out of the budget in March, Greene County Budget Officer Jeff Reinold said no other cuts are expected this year.

"We went back to the office holders and department heads and said we needed (to cut) 7.5 percent to balance this year's budget," Reinold said of the actions in the first quarter. "Out of this year's budget that (cutting) has already been done."

He noted that some departments - notably the sheriff's office and the county jail - couldn't handle cuts that steep without creating safety issues, so those departments were able to increase revenue through renegotiating vendor contracts and capturing more court costs.

The March cuts included a hiring freeze on all but the most essential county jobs, leaving open 50 of 700 total county jobs.

Now in 2010 budget planning meetings, Reinold is basing preliminary projections on an additional 5 percent drop in county sales tax revenue. He added that department heads already have made initial budget requests assuming 2010 will be another rough year.

"We're hoping the economy turns around in 2010 and things come back, building will start up again and overall economic activity will restart," he said. "But we're taking the careful approach."[[In-content Ad]]