Council eyes methods behind revenue estimates

New sales tax method bases projections off average growth, not average collections

Shown above is the main entrance to the John G. Christy Municipal Building, commonly known as City Hall, at 320 E. McCarty St. in Jefferson City.
Shown above is the main entrance to the John G. Christy Municipal Building, commonly known as City Hall, at 320 E. McCarty St. in Jefferson City.

Though the Jefferson City Council approved revenue estimates for the 2017 fiscal year without change, there was some discussion about the method used to calculate those figures.

At the City Council's first meeting on the draft 2017 budget, council members went through revenue estimates for the next fiscal year. Mayor Carrie Tergin's draft budget includes roughly $2 million more in revenue and expenses than the current budget, bringing the general fund to roughly $32.2 million in revenue and expenses. (Outside of general revenue, the city also has several enterprise funds, which are self-sustaining funds kept separately.)

The draft budget includes a $1 million increase in sales tax revenues from the current year, bringing the projection to $11.3 million.

Finance Director Margie Mueller said that projection was based on a three-year average of sales tax growth, instead of the city's usual method of projecting revenue based off an average of past collections. Mueller said this is more similar to what the state does with its projections.

But at least one council member indicated the change may be more of a policy decision the council should make.

Third Ward Councilman Ken Hussey said the new method isn't bad, it's just different, and the council may need to have a philosophical discussion on whether that's the right approach.

"That's different than the past three budgets that I've been a part of," Hussey said. "This is a policy change, in my mind, as to how we set revenues."

Mueller said the city ended the 2015 fiscal year with a 7.46 percent increase in sales tax revenue and that same line had increased 4.62 percent the year before. 

She also noted the 2016 fiscal year is projected to end with about $11 million in sales tax revenue when only $10.3 million had been budgeted.

Ultimately, the council opted to approve the revenue estimates without change, though it was noted those estimates could be changed later if the council decides to revisit them.

Tergin was not present at Monday's meeting but had a prepared statement read at the start of the meeting. 

Third Ward Councilwoman Erin Wiseman and 4th Ward Councilman Carlos Graham also were not present at Monday's meeting.

The next budget meeting is set for 5:30 p.m. Aug. 4 at City Hall.