Plan floated to balance LR budget for ’13

The Little Rock Board of Directors will vote next week on how to amend its 2013 budget to deal with a shortfall in sales-tax returns.

At the board’s agenda meeting Tuesday, staff members presented an eight-part plan to balance the current budget - partly to absorb about $2.2 million in projected sales-tax revenue that has not come into the city’s coffers. The city had projected a 1.5 percent growth in sales tax revenue from 2012, when a 1 percent citywide sales-tax increase went into effect.

The adjustments to the remainder of the 2013 budget, which covers expenditures and revenue between now and Jan. 1, would include eight pieces:

Decreasing revenue projections by $1.5 million and using about $1.7 million in contingency funds.

Adding savings from vacancies and retirements to the general fund, much of which will be used to cover overtime in the Police Department.

Transferring funds and a position to the city’s golf fund, which does not affect the overall budget.

Absorbing the sales-tax contribution to the city’s old police and fire pensions,which does not affect the overall budget.

Transferring $524,000 for special projects, including covering about $200,000 in construction costs for the rebuilt Adult Leisure Center.

Absorbing the property-tax revenue for the police and fire pensions, which does not affect the overall budget.

Reallocating the vacancy savings projected in the budget to the individual departments that produced those savings, which affects the individual departments but not the overall budget.

Transferring the fleet fund reserve to help pay for a portion of the city’s planned compressed natural gas station.

Finance Director Sara Lenehan said the major changes will come as adjustments to revenue, which includes the $2,196,000 shortfall in projected sales-tax revenue.

“The sales tax is the largest decrease,” she said. “We include in our budget a contingency allocation. Last year it was 1 percent. We will be using that contingency to balance that budget.”

Lenehan also said the majority of the increase in savings from vacant positions will be allocated to the Police Department to pay for overtime if the plan is approved.

“The majority of the vacancies were in the Police Department,” she said. “And if they had been filled, we wouldn’t have this overtime … so it’s basically a wash.”

At-large City Director Dean Kumpuris said he understood the changes, but cautioned against not planning for additional sales-tax revenue issues. He stressed the need to start collecting sales tax on items purchased over the Internet from other states and the need to attract specialty businesses to the city.

“We need to look at how we are going to grow, and without sales-tax revenue we won’t,” he said.

The board will vote next Tuesday on whether to approve the adjustments.