The Jefferson city council at its Feb. 14 meeting went through a 25-page budget for Fiscal Year 2023-24 (begins July 1, 2024), presented by city administrator Mike Palmer and financial clerk Sarah Morlan.
The proposed budget calls for a general fund levy of $13.34 (per thousand in taxable valuation), an increase of 44 cents from the current year, and a debt service levy of $2.09, a decrease of 33 cents. The total levy for general fund and debt service will be $15.43, compared to $15.32 in the current year.
The property valuation for general fund use is pegged at $138,213,853, with a total valuation of $285,311,704. Total valuation has increased about $1.7 million from the current year, but the valuation for general fund use has decreased $2.5 million. That’s due to an increase in the state rollback for residential values. The rollback is at 56.49 percent for the new year, increased from 54.13 percent in the current year. That means the taxable value of a home is only 43.51 percent of the total assessed value, rather than the 45.87 percent as in the current year.
The overall budget for the general fund is about $3.2 million. “Revenues decreased a little bit. Expenditures increased just a tad. It does make it a little more difficult as we work through it,” Palmer said.
The valuation formulas (how much of total valuation can be used for taxing purposes) have a direct effect on tax rates, Palmer explained. “If these (taxable) valuations don’t start to go up a little bit more by state formulas, we’re going to keep seeing our rates go up, unfortunately,” he said.
The budget compensates for the increased general fund levy by decreasing the debt levy. That’s possible because of financial moves in financing upgrades to the wastewater treatment plant.
Total general fund revenues are estimated at $3,262,254, with 38 percent (about $1,236,000) from property taxes.
General fund expenses are estimated to equal revenues in the proposed budget. The greater portion of expenses is police expenses, budgeted at $978,845, or 30 percent of expenses.
Palmer said the impact of inflation, primarily on wages, is the biggest cause for the increase in expenses. Inflation over the past year has increased from 1.4 percent in 2020 to 6.5 percent in 2022. “As revenues are decreasing and prices are going up, it’s a tough mix,” he said. “We’ve done pretty well just to hold where we are on this.”
Good news came on the last page of the budget, Local Option Sales Tax revenue and expenses. LOST revenues continue to see a steady increase. Revenue is estimated at $563,000. “We have a very healthy fund balance right now, which means we can do more infrastructure projects,” Morlan said.
Proposed projects include crack sealing, seal coating and concrete work on damaged roads; resurfacing W. Lincoln Way; and improvements to parking lots on S. Wilson Ave, the municipal golf course, and the new animal shelter.
“We get a good return on the local option sales tax every year,” Palmer said. “It does a lot for us.”
The council at its Feb. 28 meeting will set a public hearing on the FY2023-24 budget for the March 14 meeting.
