CLEVELAND, Tenn. -- Falling sales tax revenues that have plagued state government for 21 consecutive months have hit the city budget too.
Cleveland City Council members met Friday morning to plan the budget for fiscal 2011, which begins July 1. The proposed $36.7 million city general fund is almost identical to the present budget and uses $770,000 from the debt service fund to make up for a revenue shortfall.
Finance Director Michael Keith said Friday that Cleveland has had 11 consecutive months of slipping sales tax collections, the second largest source of local income after property taxes.
Sales tax collections have fallen in 13 of the past 15 months, he said. This year's sales tax revenue likely will be only about $100,000 above 2005 and less than 2006, he said.
"Frankly, we did well for a while, but it finally caught up with us," Mr. Keith said.
City Council members did find some good news from Friday's session. The budget includes no property tax increase and no layoffs of city workers.
Mr. Keith said the debt service fund is $2.8 million, which is above its target of $1.25 million. The general fund balance is $8.7 million, which is under the target of $9.2 million.
The budget also proposes to spend down most of the city's cash balance of $6 million. Major spending includes:
* $1 million for golf course renovation
* $2.5 million as a loan to the Cleveland Municipal Airport Authority
* $460,000 from the Meiler Trust Fund, an account restricted for certain uses
* $770,000 from the debt service fund to balance the general fund budget.
That leaves $1.27 million cash available in the bank.
"I think everyone would agree that the potential cash balance of $1,270,000 is a very small balance to have available for a city the size of Cleveland," Mr. Keith said.
Councilman Richard Banks said many other state and local governments are facing the same revenue crunch.
One bright spot was news that the city met its goal of cutting energy use by 15 percent this year.
Mr. Banks, who proposed the energy conservation goal, made a new challenge Friday; another 10 percent the next three years.