Springfield sales tax revenue 10% above budget in April
SPRINGFIELD, Mo. (KY3) -City of Springfield sales tax revenue is above budget again this month but inflation is causing some projects to become more expensive.
Thanks to people shopping local the city of Springfield brought in more than $3 million in sales tax revenue over budget. These funds go toward capital improvement projects and city employees’ salaries. While the city is seeing more revenue funds come in than expected, inflation has put some stress on the budget.
“We are seeing higher collections in sales tax but things are costing us a lot more money on the purchasing side,” said City Director of Finance David Holtman. “Inflation this past month came in at just at eight and a half percent, which really significant for those of us that plan 18 months earlier in the year, however, it just gets more expensive to conduct business as we move along.”
One of the challenges city officials is facing is an increase in costs of materials and labor needed to complete capital improvement projects.
“The road construction project on division, it was about a four and a half million dollar project,” said Holtman. “The bids came in about a million dollars higher than the original engineering estimate. Fortunately, we do have reserves set aside in our quarter and capital cent sales tax fund, but that’s just one project of many that we’re in the process of planning and getting started here at the city.”
The city is currently understaffed and is allocating money in next year’s budget to offer more competitive salaries for city employees, including police officers. In the last 12 months, revenues are up by 13% compared to last year. The additional revenue allows for the city to continue to cover capital improvement projects that cost more than originally estimated. As prices continue to rise, it puts a strain on the city budget.
“I think our economy is still strong,” said Holtman. “I think inflation is taking a toll on our local economy. Fortunately, people still are spending at a good rate, but I don’t think eight and a half percent inflation is is sustainable. I think if it continues for any long length of time, that’s going to have a negative impact on our economy.”
City leaders think that the increase in revenue is due to the federal assistance made available through the pandemic. The new proposed budget will be presented to city council in May.
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