Archive for Thursday, December 11, 2008

City’s budget finishes strong

December 11, 2008

Although some of its eastern neighbors are facing tough decisions in the current sour economy, the city of De Soto will end 2008 with about $78,000 to carry over into the next year.

The reason for De Soto’s relative strong budget situation compared to cities like Shawnee and Overland Park may be the same thing that is often bemoaned — the absence of a strong local retail sales tax base.

Retail sales in Overland Park declined 8.3 percent through the first 10 months of this year.. De Soto City Administrator Pat Guilfoyle said statistics from the County Economic Research Institute indicate De Soto’s retail sales increased 2.4 percent in the same period.

That translated into a

2.3 increase in sales tax revenue, or $9,000, Guilfoyle said. Sales tax revenue collected for 2008 was very close to the $459,000 projected in the annual budget, he said.

The city’s expenses are now projected to be $187,000 less than budgeted, Guilfoyle said. He attributed the 13 percent reduction to efforts of city employees to cut costs.

Two other city revenue sources are seeing the effects of the recession. Development fees and excise taxes are down from the slowdown in housing starts, Guilfoyle said.

More troubling is that the city recorded the largest decline from 2007 to 2008 in the county in overall assessed valuation with a decrease of 1.8 percent.

Although the housing slump has depressed values, real estate wasn’t behind the city’s valuation drop. Real estate valuations increased a modest 1.4 percent from 2007 to 2008 in final assessed valuation. That was lower than the 2.6 percent overall increase in Johnson County and the 2.5 percent for all county cities.

Personal property assessment fell 18 percent, reflecting the Kansas Legislature’s move in 2006 to phase out taxation on new business machinery and equipment. That was a sharp decline, but less than the

22.8 percent fall experienced in the county overall.

Guilfoyle said state assessed property in De Soto, the assessment on utilities and railroads, also declined steeply. That assessment was down 10 percent, compared to 6.3 percent in the county overall.

With the housing market continuing to struggle, the property tax picture could be bleaker next year. Guilfoyle said he and others responsible for budgets in other county jurisdictions while get an early presentation from the Johnson County Appraiser’s Office about what they can expect.

“The appraiser’s office is going to have a presentation in January,” he said. “That’s unprecedented.”

If bad news is indeed shared at the meeting, it will make the $78,000 carryover from this year all the more important, Guilfoyle said.

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