11/5/2009 6:00:00 AM
City will see $800,000 drop
in state money
Finance director hopes city sales tax revenue can help fill the gap
| |
|
KINGMAN - New figures from the Arizona League of Cities and Towns indicate that the city of Kingman is expected to lose more than $800,000 in state-shared income tax revenues in Fiscal Year 2010-2011, compounding an already strained city budget.
According to Kingman's Finance Director Coral Loyd, state income tax distributions are based on the total income tax collections from two years earlier, meaning the current Fiscal Year 2009-2010 revenues are based on 2007 collections, and next year's will be based on 2008 collections.
"And we all know what happened in 2008 to create the situation," Loyd said.
She referred, of course, to the economic recession, which officially began in December 2007 and was only technically declared "over" by Federal Reserve Chairman Ben Bernake this past September. That means that much of the decline in incomes experienced in 2008 and 2009 have yet to be felt by cities at large, but that's set to change starting next year.
"We all knew this was going to happen, we just didn't know the amount," Loyd said.
"There was an increase in unemployment by 5 or 6 percent, and yet revenues are going to decline by 25 percent."
Loyd said state-shared income tax revenues account for about 18 percent of Kingman's annual operating budget. This year, Kingman's share amounted to about $3.34 million, which already represents a drop of more than $475,000 from the prior year.
Next year, however, Kingman will receive about $2.52 million, meaning the city's income tax share will have fallen by more than a third in just two years. And according to Loyd, it's set to fall even further in fiscal year 2012, though not by nearly as much - just $300,000, by her estimation.
"I'm making some assumptions that the economy in Arizona is continuing to weaken in some areas; but it's been relatively flat, and there've actually been some positive trends in some business areas," she said. "There are actually more existing homes being sold - though for lower prices, and restaurant sales are up."
Still, it means the city faces more than $1 million in lost revenue over the next two years, and it will fall to the City Council to determine how best to fill the gap. "There's going to be some choices that have to be made," Loyd said. "Either we reduce services, use some reserves, or we increase local revenues."
Thus far, Mayor John Salem and his colleagues on Council have prided themselves on managing to cut city spending without impacting the level of essential services such as police, fire, sanitation and water. But Salem himself has admitted of late that there's next to no "fluff" remaining in the budget to cut.
Likewise, increasing local revenues in this case could mean pursuing additional tax increases, but that's likely to be highly unpopular with a public that's already sustained two increases in water and sewer rates in the past year, as well as rising unemployment and stagnating wages. Loyd said there is a chance, however, that as the economy starts to recover over the next year, local sales tax collections might start to replace some of the lost income tax money.
"If the economy starts turning around and we see any kind of increase in local sales tax revenue, then we can use that increase to offset the decline in state-shared revenues," she said.
Loyd added that the speed of economic recovery will be heavily dependent on local gas prices. Namely, the lower they stay, the faster and more likely Kingman's recovery will be.
"If gas prices stay moderate to where people are able to afford to travel, we should see a modest gain, economically," she said.
"But if gas prices go back to where they were last year, then we're going to be put into the same recessionary environment, and cuts will definitely have to be made."
|
Posted: Saturday, November 07, 2009
Article comment by:
Loyd
I believe the Beecher era saw some $5 million handed out in pay boosts and staff expansion when the city was awash in cash from the 2005-06 boom times. I would love to hear the argument that says a hefty percentage of that loot didn't go to the upper 20%.
Can we expect the city upper crust to step forward and make a little contribution to save their minions from the axe? I don't think I will hold my breath on that one.
Posted: Saturday, November 07, 2009
Article comment by:
No name provided
Ok let's make it simple.
A bunch of people get together some where over there and say ( here is what we need to run mohave county ) then they charge every house hold BLANK AMOUNT OF TAXES. Does not go though the county assessor office. So i guess one of the first jobs to be cut is the Assessors. If we dont use them why have them.
The State of Kentucky has Trash Dumpsters open every day there is no pick up, you do it your self, This would cut the Trash dept by half, And keep the city and state Clean.
Now lets look at any given office in Kingman, you can go in and see 4 to 5 people sitting and doing nothing everyday.
So dont raise my TAXES CLEAN UP YOUR CITY!!!!
We all have to cut back and so does the city of Kingman.
Posted: Friday, November 06, 2009
Article comment by:
kak
The Mass exodus begins to show ..well starting back in 2008. We're beginning to see an feel the affect now..Based on this the next couple years are going to nosedive worse...As people continue to move for work, or get pushed out by taxes.
Kingman will lose year after year..Almost a fitting fate for the town that refuses to change...2010 in my last year in Kingman....Whats yours?
Posted: Friday, November 06, 2009
Article comment by:
Tired of It
Hey "Chatta".... Maybe you can answer my question. Since these property taxes that are collected by the County are taking as much as 9 times more of my money for the past few years and more to come, I am not as able to support my City as much as I would like.
Out of ten tax jurisdictions some are new and most have increased. Too bad Kingman can't have a say in how much one hand is grabbing before the other.
Educate me "Chatta". I'm sure other landowners in this area would like to be "educated" also. It seems that tax code 67020 is getting a very fair share. Whatever that is. I'd much rather support the City and the kids in the City than property taxes that are totally insane.
And Cuda is right. We are not business friendly. We as a community better think about what is about to come. When that I-40 industrial corridor does start to happen there will be jobs alright. Low paying jobs that bring lots of low wage earners and their kids. We better plan for that one.
Posted: Friday, November 06, 2009
Article comment by:
cut dead wood !
Gee maybe you should cut your trash pick ups,and cut 45 % of city employes ( not fire or police)Don't think any one would notice any differance in services city employees work at a snails pace just like the county and state employees !!
Posted: Thursday, November 05, 2009
Article comment by:
RayK
I will go out on a limb and make a prediction. The City will require a sales tax hike in order to function and it will be passed sooner rather then later.
I think its time for layoffs or paycuts or reduced hours for all employees. I vote for paycuts across the board
Posted: Thursday, November 05, 2009
Article comment by:
Cause I'm the taxman...
Why not triple the motel tax to offset the cutbacks? Perhaps the City could have a going out of business sale?
Posted: Thursday, November 05, 2009
Article comment by:
townsman
WHY NOT ASK THE BIKERS FOR A HAND OUT
Posted: Thursday, November 05, 2009
Article comment by:
chatta
Hey "tired of it"....before you make a statement you might educate yourself. The City of Kingman collects no such property tax!
Posted: Thursday, November 05, 2009
Article comment by:
No name provided
I don't think we need to have 2 trash pick ups a week 1 should be enough
Posted: Thursday, November 05, 2009
Article comment by:
No name provided
Kingman does NOT want to grow and attract new businesses. It is very sad to see the town decline. It seems they are not thinking of the future and the kids that live there.
Posted: Thursday, November 05, 2009
Article comment by:
Tired of It
Well, I'd still like to know where all this property tax money is going. The property taxes went way up and still fire and police are crying broke. Can't pay teachers, so where is it going?
Posted: Thursday, November 05, 2009
Article comment by:
Cuda
If Kingman was more business friendly, the jobs would be there and economic growth would help the budget when it comes to bringing in sales revenue. But kingman wants use scare tactics, locals wants to show ignorance towards future businesses. Well then Kingman got what it deserves.
More and more people are moving out of the area do to lack of jobs which I can't blame them one bit. If Kingman wants to move forward then the locals and city officials need to change their attitudes otherwise you will all see more and more people leaving and less money coming in. You all are only hurting yourselves. Kingman's loss, some other cities gain as I say.
|
Article Comment Submission Form
|
|
