2013 Budget ~ Preliminary Information

          The General Fund receives 74% of the property tax collected.  The Budget for 2011 budgeted for $15.8 million and the actual expenditures amounted to $14.1 million.  Therefore we will be beginning next year with a higher balance in the General Fund than we budgeted for, between $1.3 and $1.4 million.  Management intends to keep the budget flat and there will be no mill levy increase on behalf of the city. Newton is similar to other cities in that the property tax bill includes taxes from several districts (schools, for one), the county, and the city.  The plan is to focus on the core functions of the city.  All of the cities have felt pressure from the State to take on additional responsibilities.  (This is also what we heard in lectures in our MPA classes)
          Areas of concern in this budget are the Sanitation Fees and the Sanitation Fund.  In 2007, the sanitation services went out for bid and the City won the bid.  Since that time, sanitation fees have not changed although services have been enhanced and there has been an increase in the cost of gas.  As a result, this fund has been drawing down.  The Sanitation Fund contributes to the General Fund which is meant to offset a lower property tax rate.  Currently it is not performing as well as it needs to in order to accomplish this.
          Domestic violence is another concern to the City fathers.  Newton will apply to renew a grant for this program in 2013, but we will have to determine if this is a core function of the City.  The city's cost this year was $125,000 and we need to consider this program's cost in its entirety, not just the city's portion.  Currently this is partially funded by the county and grant funding. 
          The General Obligation Bonds (GO Bond) is lowered by the City by about $2.1 million per year.
          There are two pieces of State legislation being considered that will have an impact on the local economy.  HB2212 deals with existing property tax and proposes that as the valuation of property increases, the mill levy rate decreases.  Newton's management team feels this can't be done.  SB332 is the other one and it allows grocery stores to sell alcohol.  If this is enacted, the City will lose revenue from licenses sold to liquor stores.  The State has said that it will make up the difference to the cities, but that is doubtful past the first year from prior experience.  The State is also proposing a Sales Tax Holiday during which the State will forgo charging its portion of the sales tax for over a holiday weekend.
          There is proposal to change the current method of Publication from the newspapers to posting it online on Newton's website.  This would result in a reduction of printing costs. 
          KPERS is the Kansas Public Employee Retirement System.  The City is aware that both the employee and employers required contributions to the system will increase, but not until 2014.
          I previously mentioned the last item - school finance.  School districts will see pressures on their tax.  In order to collect more sales tax, churches and the City may have to start paying sales tax.  This could cause the City to raise the property tax by 1 mill to offset the additional expense.
          These are the issues of concern going into the 2013 budgeting process.  Thank you, Dr. Miller.