Saratoga Springs officials heard a financial forecast that urged cautionary spending in the coming year.
Commissioner of Finance Kenneth Ivins Jr. pitched his State of the City Finances to Saratoga Springs City Council members at the Tuesday, Feb. 19, meeting. The outlook wasn't bad, but also not good, said Ivins.
People in this state think we are a real affluent community. We are not doing bad, but we are not as affluent as they think, said Ivins.
Ivins' financial warning is in part sparked by the growing difference between the city's general fund budget and funds raised via taxes, heavy bonding for city projects and a growing middle-class that is ever more susceptible to the increasing cost of living, in and outside of the city.
A key concern that the Republican majority soon entering its third month in office is pointing to is bloated sales tax revenue projections in the 2008 budget and a near nonexistent rainy day fund, or unappropriated general fund balance. However, Ivins pointed out that in addition to those, parking ticket incomes, racetrack admission, hotel occupancy and mortgage taxes could play a role in an early projected $1,045,000 budget shortfall by year's end.
Ivins and Mayor Scott Johnson both admit that it is still early in the year, and some of the numbers could eventually pan out.
Ivins said if bloated sales tax projections, at 8.5 percent in 2008 -- nearly double the revenue brought in year's past, don't pan out, the city could find itself $700,000 short on tax revenue. However, Ivins added that the city was recently awarded a $747,000 grant and renegotiated interest rates on bond accounts to free up $40,000 annually to the city capital account.
Since dropping from Saratoga County's sales tax formula in 2002, the city has seen a steady increase in sales tax revenue, according to Ivins' figures, but Johnson, in his State of the City address, entertained the idea of going back to the county formula.