BOMA looks to adjust budget with changing tax revenues
Budget talks have begun for Farragut Board of Mayor and Aldermen.
The Board started the process with workshop before its meeting Thursday, March 9, to look at its expected revenues and expenses.
“I think our budget is strong,” David Smoak, town of Farragut administrator, said, adding the staff was conservative in its projections for revenues and expenses for the 2017-2018 fiscal year budget.
Smoak estimated $11,616,176 in total revenues for 2016-17, adding Town staff projected $10,568,820 in revenues for 2017-18 fiscal year.
However, Smoak warned the Town should expect less revenue from the state Hall Income Tax, which is based off investment income.
“This is the only income tax that the State of Tennessee has, and it’s quickly going to be going away by the year 2022, I believe,” he said. “In 2017, we’re receiving $1.1 million from the Hall Tax. That represents 9.8 percent of our revenues estimated for FY 2017, so it’s a pretty large revenue stream that we know is going away in the next few years.
”This year alone, we anticipate with the state budget, [Hall Tax appropriations] will be down 17 percent,” Smoak added. “If the IMPROVE Act goes into place the way the governor proposes, it would go down an additional 30 percent for FY 2019.
“We have estimated a conservative $400,000 for next year just so we don’t rely too much on the Hall Tax.”
“I think we need to figure out how we are going to replace the Hall Tax,” Alderman Bob Markli said. One suggestion was approving a Hotel/Motel Tax.
“We really need to focus on what we are going to do to increase [the hotels’] occupancy,” Markli said.
Local Sales Tax in 2015-2016 came in at $6,201,560. The Board budgeted $5,650,000 for 2016-17 but Smoak estimated $6,100,000 for the 2016-2017 year. He projects $6,000,000 in local sales tax revenues for 2017-2018.
“So far this year, 3 percent, year-to-date, over last year,” Smoak said.
State Sales Tax for 2015-16 was 1,663,595. “We get money from the state based on population,” Smoak said. “Right now, we are 22,600 based on our last census count. With that, you get $95.30 per individual, and that goes toward the general fund. ...”
Smoak estimated the fiscal year would end with $1,813,200 from state Sales Tax.
He proposes budgeting $1,800,000 from those revenues for the 2017-2018 fiscal year.
“This is one of those areas that could be impacted by the IMPROVE Act the governor has proposed and that is currently working its way through the [Tennessee General Assembly],” Smoak said.
