Politics & Government
Mid-Year Budget Review: Outlook "Positive" This Year
But declining property tax revenue, state funding cuts may force city officials to tighten belts in FY 2012.
Six months into this budget year, the City of Bowie is in good fiscal shape, but officials say declining property tax revenues and deep cuts in state highway funding will be a challenge as the city begins work on next year's budget.
“We are looking at any way we can to constrain the growth of expenses as we approach the Fiscal 2012 budget,” City Manager David Deutsch told the City Council Monday.
Bowie’s revenues are projected to be over budget by about $1.5 million while expenditures will be under budget by about $700,000 by the end of the fiscal year on June 30, according to a mid-year budget report.
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The mid-year budget report is a breakdown of expenditures and revenues through December 31, 2010.
As of December, general fund revenues are 14.7 percent greater than at this time last year, according to the report.
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Deutsch said increases in general fund revenue come from several areas including speed camera fines and an increase in real estate property taxes.
General fund expenditures during the first six months of this year were about $2.2 million higher than last year. Deutsch said the increase is primarily due to the expansion of the police department, debt service on the new city hall, and the senior citizen home improvement grant program.
Property taxes of $26.4 million are 10.5 percent higher than last year’s $23.9 million.
But for the first time in 30 years, the city will see a decline in the assessable tax base, which will likely result in a revenue decrease of $1.5 million during the next fiscal year and a potential loss of $4.5 million over the next three years.
Cuts in state highway user revenue—which the state collects through gas taxes and other fees—will amount to a loss of $6 million over three years.
Mayor G. Frederick Robinson said he hopes state lawmakers will change course on state highway user funds. The funding to local governments was slashed by 90 percent to close the state's budget gap.
“Although the current year looks like we will be OK, there is legitimate reason for concern in the upcoming three or four years,” said Robinson.
