Budget plan coupled with promising local tax revenue: Smoak
Farragut Board of Mayor and Aldermen started its 2024 budget process with a workshop Thursday, Feb. 22, featuring some good tax revenue news.
Overall, “the revenues in the start of our planning process look strong,” Town administrator David Smoak said. “We have been in a strong position in the last couple of years, and we think it’s going to continue into the future.
“Next year, at this point, we’re projecting around $16.8 million in overall revenue to the Town of Farragut,” he said. “The biggest portion of that revenue comes from our local sales tax.
“Local sales tax in the first six months of the fiscal year was up about 9 percent over last year,” Smoak said.
As of this meeting, “What we don’t have yet is the December sales tax numbers in, which is certainly our biggest sales tax revenue producing month of the entire year,” the administrator added.
Still, “we’ll continue to monitor the sales tax to make sure we’re continuing the trend upward, but it’s going in the right direction so far,” he said.
The second largest source of the Town’s revenue is the State Shared Sales Tax, which is based on per capita income based on the state’s sales tax numbers it gets.
“We have not got this year’s numbers yet,” Smoak said. “Usually, these increase slightly from year to year. Right now, we get around $170 per capita. With 23,506 residents, that’s a little over $2.5 million per year we get in overall State Shared Taxes.”
Another stable revenue source is the Wholesale Tax, which includes wholesale beer, liquor and mixed drink tax.
“Over the last four years, again, it has been very stable,” Smoak said. “We are projecting about $1.58 million in tax (revenues) from those three sources in the FY ’24 budget and into next year.”
Expenditures
Heading into next year for the 2024-25 budget, he projected a 1 percent expenditure increase with an estimated $10.6 million.
“The Town of Farragut is a service organization,” he said. “We provide services to the community, and to do that, your largest expense that you have is your people — having people to provide those services.
“Sixty-seven percent of our overall budget is people,” Smoak added. “The rest is our operating expenses to get the job done.”
Looking at the Town’s 10-year history of personnel and operating costs, “you can see, in the last few years, we’ve had to keep pace with the local employment market when it comes to salaries and benefits,” he said.
“Those are things everybody has been tracking and trying to keep up with as much as we can,” Smoak added. “Those costs have accelerated a little bit over the last couple of years.”
On the whole, though, in looking at the General Fund over the last 10 years, he said the Board would see the Town’s revenues have far outpaced expenditures.
“That allows us to save money and pay for projects and things we want to do with cash, without having to go into debt to do a project,” Smoak said.
