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CITY OF LINCOLN   •   NEWS RELEASE   •   FOR IMMEDIATE RELEASE

Date:
July 19, 2001
For More Information Contact:
Diane Gonzolas, Citizen Information Center, 441-7831
Don Herz, Finance Director, 441-7411

Mayor Opposes Additional Spending Requests

Mayor Don Wesely said today he will oppose additional spending proposed in the city's 2001- 2002 city budget by the City Council Monday.

Wesely said the latest sales tax collection report, which he released today, shows sales tax receipts for the city continue to be below projections this year. For that reason, he is adjusting his proposed 2001-2002 city budget as a precaution, and he said he will resist efforts to add new spending to the proposed budget.

Monday, the City Council passed a motion to adopt $219,524 in spending cuts and additional revenue increases and $229,265 in new spending. Mayor Wesely had proposed applying $278,829 in state aid plus an additional $79,829 ($358,400 total) to reduce the sales tax revenue projections, which have been flat and showing a downward trend in earlier reports. The most recent report shows the city sales tax receipts are about $1.5 million less than the year to date projections.

"The city must budget cautiously and spend wisely," Wesely said. "The economy has not grown at the same pace as it did in previous years, and sales tax collections have lagged. Sales tax receipts pay for about 43 percent of the city budget. While sales tax receipts for at least the last seven years have generated more revenue than projected, this year as the overall economy slowed the sales tax receipts have been less than projected. If sales tax receipts remain slow, as this trend continues to show, then the city must recognize that and adjust accordingly to stay within the budget.

"In reviewing the Council's action Monday and the new sales tax receipt report, I can agree to adopt the $219,524 in cuts and revenue increases, but will not agree to the $229,265 in new spending," Wesely said.

The Council's proposed cuts which the Mayor agreed to adopt include eliminating: $79,613 in additional revenue from Personnel savings; $25,000 for installing new lime green pedestrian crossing signs near schools $22,500 to replace 275 residential street signs; $11,400 to open a sprayground at Woods Park. $25,000 proposed for departments to implement more e-commerce government to improve services using technology; and $ 16,011 to operate the Senior Center Heritage Gift Shop. The Council also proposed a revenue increase of $40,000 by raising the fare for football game bus shuttles from $2 to $3. The Mayor agrees with that increase which, brings the total cuts and new revenue to $219,524.

Mayor Wesely said he would not support the $229,265 in additional spending proposed by the Council that included: $10,265 for additional child care inspections above what is required by state law; $94,000 to keep the Crosstown bus route; $22,500 to add more contractual tree trimming; $50,000 to create a downtown shuttle bus route; and $52,500 to add new City Council staff and discretionary funds.

"Unfortunately, with the sales tax receipt report, I believe it is more important to reduce our sales tax projection revenue than spend it on these items," Wesely said. "I have visited with a number of the Council members, and they understand my concerns. I appreciate the Council's six to one vote last Monday to support a budget of about $111 million and revenues to fund it. "Key to supporting that level of spending is the proposed increase in the occupation tax," Wesely said. "While I don't like proposing a change in the occupation tax, it is a tax that will have a lesser impact on taxpayers, and taxpayers have some ability to control how much they pay, unlike an increase in the property tax."

The occupation tax rate was last adjusted in 1990 when it was increased a similar amount from 2 percent to its current 3.8 percent. Wesely's proposed budget would reduce the property tax rate 3.1 percent.

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