The city of Carthage proposes to spend $10,669,469 on city services in the fiscal year 2014 that starts on July 1, 2013, and the council will take a final vote on that budget at its next meeting Tuesday.
Carthage City Administrator Tom Short said general revenue spending, which funds most city services, is down slightly from a little more than $8.2 million to just under $8 million, but rising personnel costs and the loss of sales tax revenue from vehicles purchased out of state is crimping the city's budget.
Short said this years' budget reflects the loss of at least $60,000 in revenue from sales taxes that all cities and counties used to charge people when they purchased a car, truck, trailer or boat out of state. In 2012, the Missouri Supreme Court ruled those collections illegal unless a city or county had a use tax in place, something Short said the city will consider adopting.
"Even though it doesn't sound like a lot, ($60,000) is a lot of funds for the general fund to give up," Short said. "Right now we're looking at other revenue sources to see if we can get something to make up that difference. We're just looking to see what's available and we'll probably be talking to the budget committee at the next meeting about some alternatives."
Voters in Carl Junction rejected a proposed use tax last year when it appeared on the ballot there. Carl Junction city leaders are talking about putting the measure before voters again, and Joplin and Jasper County leaders are also discussing putting a use tax on a future ballot.
Officials have said Jasper County and the cities here stand to lose more revenue from not collecting taxes on vehicles purchased out of state because the county is so close to Kansas and Oklahoma.
Short said this budget, like budgets in the past three years since the economic downturn, is focused on maintaining services at current levels.
He said increases in health insurance premiums, workers compensation insurance and retirement fund premiums are straining the budget.
"We've budgeted for a 13 percent increase, but the numbers we're hearing are a lot higher than that," Short said. "Basically revenues are for the most part flat and our personnel expenditures are the ones that went up fairly high because of the benefits costs. Workers comp premiums went up about 15 percent, the LAGERS retirement premiums went up about 12 percent and the police and fire pension rate went up about 10 percent. We did have an increase in overall revenues last year, but those were overshadowed by those personnel costs."
Short said the city will be spending more of the capital improvement sales tax money coming from the tax that voters agreed last year to extend for another 20 years.
Page 2 of 2 - He said the city budgeted $479,000 in capital spending for the coming year, including the following projects:
• Rebuilding Civil War Road from Americold north to I-49 at a cost of $140,000.
• Replacing the 13th street bridge and improving drainage at the bridge at a total cost of $230,000.
• Improving the storm water drainage ditch near Fairview Elementary School at a cost of $45,000.
• Bridge maintenance citywide, and storm water improvements at Freer Park for a total of $54,000.
Short said the budget proposes about $331,000 in deficit spending, using the city's fund balance, the unallocated money left over at the end of the fiscal year, to cover the difference.
Short said the city has been using its fund balance since the economic downturn of 2008-2009 to maintain city services in the face of dropping sales tax revenue.
Short said the fund balance could run low in the near future depending on revenues in the new fiscal year.
The council meets at 7:30 p.m. Tuesday at Carthage City Hall on the east side of the Carthage Square.