SILER CITY — The Town of Siler City government is now projecting better-than-anticipated — at least by a little bit — sales tax revenue for the upcoming budget year, according to Tina Stroupe, the town’s finance director.
Stroupe provided the updated projections at a Siler City budget meeting conducted by videoconference last Thursday.
In previous discussions, Stroupe had estimated an up to 20 percent reduction in the town’s overall revenue projections related to COVID-19. But Stroupe noted that updated projections from the League of Municipalities and “interactions with peers from other agencies” may not require such a drastic outlook.
“We also took into consideration that we do not have the tourism industry that more urban areas may have and we also do not have shopping malls, theaters, convention centers and stadiums,” Stroupe said. “Those types of establishments and industries could drive a larger loss in revenue during this time of uncertainty.”
For the moment, Stroupe is estimating a 9 percent drop in sales tax revenue in the first quarter of fiscal year 2020-2021, with a 3 percent drop the second quarter. The third and fourth quarters will likely remain flat. As a result, the sales tax revenues are projected to be down FY 2020-2021 by about $77,600. This year’s sales tax revenue is also down — about $79,000 — from the originally budgeted revenues. The towns’ current estimated total budget for FY 2020-21 is $15 million.
Siler City Town Manager Roy Lynch noted during the meeting that the town “mirrored what the county did,” using a moderate level of the League of Municipalities’ projections. They also consulted with surrounding municipal leaders to see what other communities are anticipating.
Though the projection is not as dire as originally expected, the Siler City Board of Commissioners agreed through consensus that some expenditure reductions would be required to ensure that the town’s finances can weather the economic storm. The board decided to put a hold on all new additional positions in the upcoming fiscal year. In addition, any openings that the town currently has, except for emergency responder positions, will also be frozen.
“We do not want to have to furlough any long-term full-time positions,” Lynch said.
The board is choosing not to “dig ourselves into a hole that we can’t dig out of,” according to Commissioner Lewis Fadely, and Commissioner Chip Price said in agreement that he would “rather not put in” new expenditures only to “take it out later.” The board is also canceling all nonprofit funding in the upcoming budget. Nor will it will not be budgeting funds for any “pay for performance” or increased benefits for employees, but commissioners did agree they will revisit those items in the second quarter to reevaluate the town’s finances.
Lynch noted that of the 20 communities he surveyed about their budgets, only six were offering any type of salary increase and those were only for “cost of living.”
“All of us have endured some sort of hardship or difficulty,” Price said. “If we just went on like there wasn’t any problem, I think our constituents would be more upset.”
“These are tough decisions,” said Fadely, “but it keeps as much of our staff employed as we can.”
Casey Mann can be reached at CaseyMann@Chathamnr.com.