North Little Rock officials are optimistic about a 2020 budget that is projected to bring in around $71 million in revenue, but the key will be spending habits of consumers remaining steady.
City finance director Ember Strange projects the city will bring in $71,436,425 in revenue in fiscal 2020, a 2.2% increase from the $69,884,752 projected for 2019.
"We feel good about these numbers," Strange said. "It will all depend on the trends staying steady."
Mayor Joe Smith credited the increase in the 2020 budget to a fairly new internet sales tax that wasn't included in the 2019 budget. Strange also noted that the city's sales tax is projected to bring in $35 million in 2020, a 3.3% increase from the previous year.
"I had to run a lot of historical data on these revenues because I hadn't been here," said Strange, who has served as finance director for only 2½ months and started in the middle of the 2020 budget talks. "I ran numbers anywhere from the last five to 10 years to get the historical patterns of the revenues, and took into account seasonal changes that I knew affected the revenues."
Strange said she used yearly and monthly trends to reach the estimated $35 million in revenue.
"Your sales tax numbers are really hard to predict," she said. "Hopefully consumer spending here is not down. With sales tax it's really dependent on what people go out and spend. That is our biggest revenue stream."
That means there will probably be some fluctuation in the 2020 budget, Strange said.
In 2018, the finance department predicted a total of $68,023,708 in general fund expenditures in 2019, but the city has exceeded that estimate already with expenditures of $74,216,814.36.
Strange said numerous factors contributed to the city coming in over budget.
Each January, the city looks at all projects budgeted for the previous year that weren't completed and looks at what needs to be rolled forward or re-appropriated to the current year.
"It's not that we spent more in revenue, because that was budgeted for the prior year," Strange said. "It was just that there were some bigger projects. Like one of them was East McCain overpass. That had been budgeted in the prior year but wasn't completed, so we had to re-appropriate it in the 2019 budget."
Special Appropriations spent approximately $9,112,820.47 in 2019, but is budgeted for only $6,739,614 next year. Strange said the main reasons for that are projects like the First Orion parking lot, renovations to City Council chambers and a 911 telephone system upgrade have been completed, freeing up more than a $1 million.
Special Appropriations' proposed budget for 2020 includes $100,000 for trail enhancements and $50,000 for public art.
Public Works also exceeded its 2019 budget of $1,174,075 by $1,036,370.48 to cover cleanup expenditures from flooding along the Arkansas River earlier this year.
"We are working with FEMA right now and hopefully will recover 75 percent of costs," Strange said, referring to the Federal Emergency Management Agency.
Strange said the city anticipates a surplus of $3,344.05 in 2020 if everything goes according to plans.
State Desk on 11/04/2019