FAYETTEVILLE — The future for the next city budget looks grim as revenue projections remain flat. And it’s not likely employees will see a raise, city officials said.
“We’re not going to be showing any kind of revenue increases because we can’t seem to predict it,” said Don Marr, Fayetteville chief of staff.
When the 2010 budget was drafted last year, budget officials recommended a 2 percent increase in revenue from the previous year. At the time, Paul Becker, finance director, expected inflation would lead to increased prices and slightly stronger sales tax returns. That prediction has not panned out.
“And we just have not seen that yet in the national economy,” Marr said.
So far this year, the city’s sales tax collection is down nearly $570,000 from what was budgeted, according to Fayetteville sales tax reports, a decrease of 4.2 percent.
Sales tax shortfalls prompted the mayor to launch a series of budget cuts and fee increases. And the possibility of employee furlough days has not been ruled out.
“We’ll have a challenging budget for next year,” Becker told the City Council during Tuesday’s session.
The mayor — who was not at the meeting because of vacation — is asking the council to approve his recommendation that a 2 percent increase in employee health insurance premiums be absorbed by the city, Marr told the council.
“The mayor feels very strongly that we need to absorb that in this environment of no raises,” Marr said, adding employees raises are not expected in 2011. The 2 percent increase in health insurance premiums would cost the city about $80,000, Becker told the council.