Gering’s initial budget workshop last week started with a balanced budget for fiscal year 2023 of just over $42 million, but it wasn’t without some discussion of the need for future changes in revenue streams.
About $340,000 was cut from initial department requests, the majority of which came from rejection of requests for a deputy city clerk, and additional librarian and police officer positions.
City Administrator Pat Heath told the council the decisions in the current preliminary budget followed the pattern of recent years in which amenities offered were increased, but balancing the spending document required cutting improvements, delaying maintenance items or equipment purchases, and even turning down requests for new staff, and that such a model was unsustainable in the near future.
Interim Finance Director Liz Loutzenhiser said the issue the city will face comes down to the balance of budget support provided through property and sales taxes versus transfers from the city’s utilities enterprise funds. During a recent electrical rate study, officials with the Municipal Energy Agency of Nebraska said they were shocked at a transfer rate of 34 percent or more from the Gering Electrical Fund to the city’s General Fund, which was higher than most other communities in the state.
Loutzenhiser noted that transfer rate is about as high as it can be without causing issues with the State Auditor, as statutes are clear that city operations should be funded primarily through tax revenues, as opposed to shifting those costs to ratepayers.
Heath said that means some hard decisions await budget discussions next year and beyond. “If we want to continue to provide the services we provide, we need to really consider some type of increase in taxes or another way to increase revenues in the general fund,” said Heath. “When we compare with Scottsbluff, they have all the box stores and much of the retail, I won’t say they have all, but they receive over $5.3 million in sales tax revenues. We get $1.2 million.”
Gering’s municipal property tax levy has remained among the lowest for First Class cities in the state, currently ranking ninth lowest. In the Panhandle, Scottsbluff and Alliance have lower mill levies, while Sidney and Chadron have higher levies than Gering as of 2020.
Loutzenhiser told KNEB News that few additional tweaks to the spending document are anticipated after the official property valuations are released, which is expected by August 20th.
