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Since the start of the fiscal year in July, Springfield City sales tax revenue has been about $800,000 less than city leaders estimated for the general fund. KSMU’s Rebekah Clark asks: how will this affect our city?
According to a press release from the city, the projected revenue for this month was about $3.5 million; however, the actual receipts of the revenue were more like $3.1 million.
Year-to-date, the city is nearly six percent below budget expectations.
Mary Mannix Decker is the finance director for the City of Springfield. She says that last year, the Missouri Department of Revenue changed its processing time. So, for the first fiscal quarter of last year, there were some businesses that had four payments processed instead of three for the quarter. She says that could be part of the difference.
“What we’re doing right now is we’re watching our expenditures very closely and will continue to both track our sales tax revenue and analyze monthly as it comes in to determine where we think we’re going to end the budget year. We’re only four months into our fiscal year so there’s certainly plenty of time for recovery, but at the same time, we want to be very careful because sales tax does make up over fifty percent of the revenue for the general fund.”
Decker says that sales tax revenue is driven off of consumption, so for this year, spending in our local economy is lower. She says at this point, the department is trying to figure out how much of the reduction is from people not spending money, and how much of the reduction is due to the payments not yet being processed.
“Sales tax revenue is a primary source of revenue certainly in the general fund, but is important in all other areas of the city. We use it for capital improvements and for our transportation tax, so we’re really aware of that, we monitor it very closely. As we go throughout the fiscal year, if we feel like we’ll need to cartel expenses, we’ll certainly do that in order to balance that budget with revenue.”
Decker says that other sources of revenue, like the Use Tax, have actually come out better than projected. She says those areas will help offset the budget shortfall.
For KSMU News, I’m Rebekah Clark.