Lebanon’s tax revenue from March is now available as city councilors continue the budget process, with sales tax figures coming in higher than estimated.
“I got the information in for sales tax, that what we should be receiving for March is at $1,094,000, which is about 3% higher than it was last year at this time,” Finance Commissioner Stuart Lawson said. “It came in better than I expected, which is good, but we’ll need to see what happens over the next two or three months, just to make sure we don’t have a big dip from whatever we get in for April.”
However, the city did see a significant drop in business tax collections — approximately $436,000 compared to the same time last year, a 52% reduction. Lawson said most of the city’s business tax collections happen in May, and uncertainties surrounding tax revenue come as the city deals with a $560,000 budget deficit.
One of the ways the city is looking to trim its budget this year is through significant cuts to equipment and machinery in the Public Works Department.
“As long as the guys at the garage put me a Band-Aid on stuff and keep us running,” Public Works Administrator Lee Clark said. “It may get more Band-Aids than I really want, but if that’s what we’ve got to do to get over the curve, then that’s what we’re going to try to do. If something gets to the point of no return, then I am going to have to come back.”
Some of the proposed budget cuts include $265,000 to equipment and machinery used for street department projects, $450,000 to sanitation equipment and a combined $820,000 to improvements and equipment in the drainage mitigation fund. They represent a combination of recent and postponed purchases.
“I’m just a little nervous about the amount of equipment we’re not going to be funding,” Ward 6 Councilor Jeni Lind Brinkman said. “It appears to me that instead of looking at operational cuts, you looked at just capital cuts, and what I’m concerned about is equipment failures and coming to us with budget amendments, and we’re going to end up in a situation where we’re having to go into our reserves.”
Brinkman said those types of cuts have been common throughout this year’s budget process and asked if the city could look more closely at operational expenses.
“If you look back to the street department budget, you go back and look at that kind of thing … operating is our personnel,” Public Works Commissioner Jeff Baines said. “You won’t find significant cuts there. If you’re going to cut in operations you’re going to lay off people, and that’s the bottom line.”
The council also reviewed one-time grant funding that Gov. Bill Lee allocated in April as a COVID-19 stimulus. Lebanon is expected to receive $803,500 after the funding becomes available on July 1 and has budgeted $500,000 for renovations at a building planned to house public services administration.
“This building, it’s been set aside,” Lawson said. “We’ve been trying to do this for the last few years, and one of the categories would be to renovate one of our existing buildings, and since that building is going to be renovated to house the public services I thought that would be a good place to put that.”
Lee’s grant can only be used for certain expenses, such as public safety, road projects and facility upgrades. Lebanon’s share is also being allocated to four detective vehicles for the Lebanon Police Department and a small fire truck for the Lebanon Fire Department.
COVID-19 will likely continue to impact the budget through tax revenue, particularly as figures from April and May arrive. Officials are hoping the half-cent sales tax increase that began this month can offset the losses from business closures.
“Stuart’s revenue estimates are very conservative, which is good,” Lebanon Mayor Bernie Ash said. “I think when we look back at April and May and see where we’re at with the half-cent sales tax, we may be in better shape than we thought we were.”
Lawson said he hopes the city can hold a public hearing and first reading on its budget on June 16 and pass it by June 30, but a date has not been formally set for that or the next budget review session.