Falling sales taxes fuel Basalt’s 2003 budget cuts
December 3, 2002
A 12 percent free fall in Basalt sales tax revenues so far this year has reinforced a decision by town government officials to slice spending in 2003.
Through October, the town had collected about $1.3 million in sales tax revenues. Last year at that point the town had collected about $1.48 million and headed for one of its best years despite tough economic times after Sept. 11.
Town Manager Tom Baker said the staff braced for the downturn by forecasting a 10.5 percent decrease in sales tax revenues this year. Even that “dramatic” drop proved to be optimistic, he said in a memo to the Town Council.
Sales tax revenues have traditionally accounted for about 60 percent of the town’s revenues ? a number high enough to make or break the municipal budget. Baker said no sales tax revenue growth is expected in 2003 or the foreseeable future.
“The economic downturn is expected to last for several years and peak sales tax collections may not be attained again until 2006,” he wrote. “As a result, expenditures need to be reduced.”
@ATD Sub heds:Oddity of government
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@ATD body copy: Basalt officials approved a final budget last week after a process that members said was extremely difficult because it required layoffs.
Ironically, the town ended up with a bigger budget than 2002. However, the $4.06 million budget is deceiving, Baker said, because it anticipates receiving some grants and starting work on a project that relies on grants.
After adjusting for those specially earmarked funds, expenditures are really down 2 percent, he said.
Complicating the matters are the status of two possible grants. The town has applied for a $450,000 grant from Great Outdoors Colorado for help in converting its Levinson open space parcel into a riverside park.
In addition, the town hopes to receive a commitment for $150,000 per year over the next three years from the Colorado Department of Transportation. If that commitment comes through, the town has earmarked $500,000 to help ease the flooding potential on the Roaring Fork River.
With the potential for large grants, sales tax revenues are expected to account for only 46 percent of revenues next year while property taxes will account for 9 percent. Combined, they will provide $2.36 million in revenues.
@ATD Sub heds:Cops get biggest slice
@ATD body copy: The largest slice of Basalt’s budget pie goes to the police department. It will account for about $809,500 in next year’s budget, or about 20 percent of expenditures.
Public works projects will account for $740,000, or about 18 percent of all spending, assuming the funds for the river project are received. In addition, another $554,000, or 14 percent of spending, will be on roads.
Meanwhile, the town has pared $175,000 by laying off two full-time employees and one part-timer. They received a combined total of $70,000 in “separation” packages, according to the budget.
Another position, an investigator for the police department, was eliminated by attrition.
Remaining town employees will receive their first raises in more than a year. The town plans a 3 percent adjustment in salaries in 2003 to offset increases in the cost of living.
In addition, the town is embarking on a two-year mission to raise salaries based on the results of a salary survey conducted among governments of similar towns. Baker said raises will be given with the goal of bringing Basalt personnel to the midpoint of levels reported in the survey.
Basalt Mayor Rick Stevens said the layoffs were the toughest part of the budget process.
“It’s unfortunate that we can’t provide for everyone all the time,” he said.
But he gave Baker and his staff a vote of confidence by saying their budget planning maintains service at the levels the community expects.
“You guys should give yourselves a big atta-boy,” Stevens told Baker and town finance director Renae Gustine after the budget was approved.
“Atta-person,” corrected Councilwoman Jacque Whitsitt.
[Scott Condon’s e-mail address is email@example.com]