The upcoming fiscal year’s budget is taking center stage, and the key player in this financial drama is none other than the Real Estate Property Tax, constituting nearly half of the General Fund’s funding sources. Brace yourselves for the details, presented in plain English with shorter sentences.
Real Estate Property Tax Holds the Reins
This budget revolves around the anticipated increase in assessed property values. However, the real impact on the budget remains shrouded until we receive the Constant Yield Certification from SDAT in February.
Employee Compensation and Healthcare on the Radar
Salaries in the proposed budget include a 2.5% cost of living adjustment, as negotiated with the union. Merit increases are also factored in where applicable. The healthcare costs are expected to remain stable, with the possibility of using the healthcare rebate if necessary.
Budget Projections and Expenditure Guidelines
As we embark on the budget process, revenue projections align with the current year. The City Manager’s directive to department directors is clear: maintain expenditure levels at FY2024 amounts unless justified by new services.
New Positions and Compensation Study Await Decisions
While the need for a few new positions is acknowledged, decisions are on hold until mid-February when a better estimate of property tax revenue emerges. The results of the classification and compensation study, presented by the Human Resources Director and Paypoint HR Consultant in early February, will further guide decisions.
Mayor and Council Requests:
Requests from Mayor and Councilmembers for FY25 are not actively sought, but if you have specific proposals, submit them by your Council district before February 6, 2024.
Mark Your Calendar: Key Dates Ahead
Stay in the loop with crucial dates:
February 6: Mayor & Council requests/ resident suggestions due.
March 8: FY2025 Proposed Budget & CIP published on the City’s website.
March 23: Saturday Budget Worksession.
May 7: Public Hearings on the Budget and Constant Yield Rate.
May 21: FY2025 Budget adoption.
Homestead Tax Credit (HTC): A Financial Safety Net
Learn about the Homestead Tax Credit and how it shields homeowners from property tax increases. The City Council has maintained a 0% cap since FY2019, offering maximum relief. Each percentage point reduction represents $22,000 in property tax revenue.
Fiscal Impact: Balancing the Budget
The City Manager will present a proposed balanced budget to the Mayor and Council, ensuring that projected expenditures align with revenue. The Homestead Tax Credit, if retained at the 0% cap, could impact property tax revenue, but the proposed budget aims for a harmonious financial equation.