Jackson's $18.8 million 2002 budget tops this year's

JACKSON, Mo.

Gov. Bob Holden is cutting hundreds of millions from the state budget, Cape Girardeau County has shrunk its budget for 2002 by a half-million dollars, and six months from considering its next budget, Cape Girardeau city officials are just happy the current revenue loss won't be more. They say a municipal tax increase is probable.

An official recession and the Sept. 11 terrorist attacks are blamed for the reductions in revenues many government officials are both witnessing and trying to anticipate. But the city of Jackson just approved an $18.8 million budget for 2002 that is $2 million more than the 2001 budget and includes funds for capital improvements being delayed. More than $1.5 million of the increase will fund improvements in the city's electrical system.

Jackson isn't bulletproof, officials say, but its growth over the past decade and the electric utility it owns enable the city to keep growing while some other government entities are retrenching.

Mayor Paul Sander says the city's 30 percent growth over the past decade is the big reason its revenues remain strong. He expects the growth to continue over the next decade, though at 10 to 15 percent.

Jackson's sales-tax revenues have increased by an average of 8.5 percent over the past five years. Despite the recession and Sept. 11, Assistant City Administrator Larry Koenig says those revenues have remained steady through the end of 2001.

Sales-tax revenues increased by 13.17 percent in 1999, by more than 9 percent in 2000 and by 7.5 percent this year.

Koenig estimates revenues to increase by 5.5 percent in 2002 to $1.8 million. Mayor Paul Sander is happy with that projection, though he expects revenues actually will go up by about 8 percent.

Fiscal conservatism

Koenig is known as one of the most fiscally conservative budget makers around. Jackson officials say fiscal conservatism filters down to all departments.

"We run a pretty lean operation," city administrator Jim Roach said. The city probably could add 20 employees to its full-time staff of 116, "and they would be busy," he added.

The utility that produces Jackson's electricity is expected to generate about $8.5 million in receipts in 2002. About half of that amount maintains the utility and provides a reserve to be used in case of emergencies. The remainder is transferred into other funds that maintain a number of other city departments, including the parks. The utility enables the city to control taxes.

The city has taken the approach of making departments capable of generating income to support their own operating costs. Trash collection is the one department where that approach is lagging, but the city is studying changes that would make the system more cost efficient.

The revenue boost the utility provides doesn't mean the city isn't being cautious. Jackson administrators have decided to wait to dig a new water well that would serve the industrial park in the northern part of the city. Roach also predicts that the amount of money produced by the electric utility will decrease in future years because of changing electrical market forces. "In the future we will not be generating the same amount of surpluses," he says. "Costs are going up internally and purchasing is going up. We're going to work hard to keep the fees to our customers the same."

The city is nearing completion of a substantial development of its water and sewer infrastructure. The city's infrastructure is sound for years to come, Sander says.

"The key to our water, sewer and electric successes has been that we have the electric surplus fund that guarantees Jackson's future from year to year," Sander said.

The city has seen a slowdown in residential and commercial building starts, "but it's still pretty strong for a community this size," Roach said.

Koenig doesn't think the economic situation is as bad nationally as predicted. "Everybody was talking doom and gloom after Sept. 11. It's not turning out to be true."

Some economists predict the recession won't be long-lived. "Maybe we'll get lucky and it will skip over us," Roach said.

Tighter budgets

Cape Girardeau County's 2002 budget of $13.5 million is $500,000 less than the 2001 budget, and its capital improvements do not include a juvenile detention center the county had planned to build next year. The 160 county employees and officeholders will receive 3.5 percent pay increases.

County Auditor and chief budget officer H. Weldon Macke has said revenues from federal and state program reimbursements were lower this year than projected.

Sales-tax revenues, the largest source of income for the city of Cape Girardeau, currently trail the budget projection by 2 percent. "Given the economy, that's better than anticipated these last few months," said Cape Girardeau city manager Michael Miller.

Cape Girardeau will start working on its next budget at the end of next month, but a team of employees already is evaluating the city's revenue picture over the next five years.

"I anticipate they will make some recommendations and that they will recommend an increase in taxes," Miller said.

The view is different from Jackson.

"I don't anticipate us having to have any kind of tax increase in the near future," Sander said.

sblackwell@semissourian.com

335-6611, extension 182