- Last Updated on 07:05 AM 10/28/09
- BY Doug Ford
Three months into the current fiscal year, South Boston budget projections for the most part are near or above expectations, according to town Finance Officer Erle Scott. “We tried to cut back on our expectations this budget year and cut the budget accordingly in anticipation of things that were going to happen,” Scott said Monday before council’s monthly work session.
He told council at its monthly work session that year-to-date revenues (end of September) were $2,121,769, or 24.7 percent of the $8,597,328 budget for 2009-2010.
That revenue figure does not include $108,000 combined thus far in personal property and real estate tax collections.
“Revenues are hanging in there with expenditures a whole lot better than what we anticipated.”
Noting the economy, Scott said that the town made a conscientious effort to get its tax bills out to town residents earlier this year.
Real estate taxes have been out 13 working days and personal property taxes have been out nine working days as of Monday.
“What we were trying to do is give our taxpayers a little extra time between now and the due date of December 5, in other words, a few more pay days,” he explained.
Tax collections are currently running ahead of projections in four of five categories, even when taking lowered expectations into account, according to the tax comparison report.
Local sales tax figures, year-to-date, reflect a balance of $102,058, out of the budgeted amount of $340,000, while consumer utility tax collections, year-to-date, reflect a balance of $119,957 out of the budgeted amount of $420,000.
Occupancy tax collections currently reflect a balance of $49,084 out of the budgeted amount of $155,000, while meals tax collections thus far are $203,175 out of a budget amount of $600,000.
The only tax category currently falling below projections is one tracking telecommunications tax collections, at $136,194 year-to-date, according to Scott’s report.
“Local sales tax collections are doing a little bit better than we expected, because it’s at 30 percent of its budget already,” said Scott.
“Bear in mind we lowered the budget anticipating there wouldn’t be as much sales activity in this area, but we’re just a few dollars short of matching 2008 with a lowered budget.
“The consumer utility tax is holding on and is actually a little better, and that budget is the same as last year.”
“Telecom tax collections are not going too well right now,” Scott pointed out.
“I think that’s primarily due to the recession and some people doing away with some cell phones or changing plans, whatever, or not texting as much, because the activity is what you’re taxed on.”
We’re well pleased with the occupancy tax. We didn’t have quite as good a month in September 2009 as we did in September 2008, but back in September 2008 one motel establishment paid a couple of months of occupancy tax they had missed before, and I think that’s why that figure was inflated.
“We didn’t lower the telecom tax enough it appears, but we lowered occupancy tax projections by $10,000 (to $155,000) and it looks like that will come in at 126 percent of our projected figure.”
Meals tax collections were lowered in the current budget (from $625,000 to $600,000), and those tax collections continue to exceed expectations despite the slow economy ($203,175 year-to-date), Scott explained.
“I thought this was the year that would back off a bit, but even in a recession that’s the one thing people still want to do in order to treat themselves (dining out).
“That looks like it’s in good shape, and September was one of the best months we’ve had in many years.”
Scott said the town had been extremely conscious of the economic downturn and planned for it in its budget process by being cautious and conservative with their revenue projections.
“We were saying if we don’t need it, don’t buy it,” Scott said.
“It’s a needs list only and that has a lot to do with our early (budget) successes.
Budget Issues Down The Road
Scott said town staff and council pared its budget in anticipation of cutback in state funding for police services.
In 1979, the General Assembly created a new program of state aid to localities with police departments, as part of the compromise in House Bill 599 of that year concerning annexation. The funding formula is primarily driven by population growth and is essentially unchanged since 1979.
“The 599 police support is what the state sends to localities, and we knew that was going to be cut,” said Scott, who anticipated those cuts as he helped prepare the current year’s budget.
“We cut that back this year from last year, and it’s a good thing that we did because they’ve already cut us.
“We anticipated that, but it’s still going to cut us about $10,000-$12,000 even if the state doesn’t cut us any more.
“I feel we can make that up somewhere else, and don’t feel it’s a problem if the state doesn’t cut us any more.”
Scott, noting the budget cuts and layoffs in VDOT, said he would not be surprised to see cuts in lane mileage payments to localities somewhere down the road.
“It would be interesting to see, what with the cuts in the VDOT budget, if the state would cut our lane mileage,” Scott explained.
“The first payment was about $400,000 or something like that, but I just don’t know how they can cut back on VDOT without doing something to lane mileage for the localities.
“I anticipate they’ll do that, and that’s one thing that worries me, so we’re watching that closely.
“But, everybody is buying into holding costs down, and I think things are good so far.”