According to a presentation from City Manager Pete Peterson, revenues for the 2020 fiscal year are expected to barely exceed the $91 million collected in the current 2019 fiscal year.
As for local sales tax revenue, city leaders expect collections for the 2019 fiscal year will also narrowly surpass the roughly $21.5 million collected in 2018.
When compared to the budgeted amount for the 2019 fiscal year, Johnson City collected $12.3 million in local sales taxes, or 56 percent of the $22.02 million amount budgeted, for the first seven months ending Jan. 31, 2019, according to a March 21 financial presentation from Johnson City Finance Director Janet Jennings.
“We probably will not collect the amount of sales tax that we budgeted for this year, and we’re discussing, perhaps, budgeting the same number for next year that we budgeted this year so that’s a more realistic number,” Peterson told commissioners during Monday’s agenda review meeting.
“As we get more sales tax information in, we’ll have a better feel for that. ... Sales taxes are really flat.”
It is important to note the $12.3 million local sales tax total does not account for December, as sales tax collections track two months behind. But, Assistant City Manager Bob Wilson did tell commissioners Monday that December collections for 2019 were down compared to the previous year.
Total expenditures for the city’s 2019 budget are projected to total $91 million, while 2020 expenditures are estimated at just below $93 million, according to Peterson’s slide show presentation.
One portion of the budget expected to see declines is the amount of revenue generated from licenses and permits, which is projected to decrease from just over $800,000 in 2018 to just over $700,000 this year.
For the first seven months ending Jan. 31, 2019, total license and permit revenue for the current year was $110,010 lower than the amount generated the previous year.
While those permit and license fees only account for a small portion of the city’s total revenue, Mayor Jenny Brock seemed particularly concerned because a decline in permits and licenses could indicate less development is occurring within city limits.
Peterson told Brock he thought the decline in permits and licenses in Johnson City could be attributed to a number of factors.
“I think there is a public perception (about developing in Johnson City, and) the fact that other jurisdictions don’t enforce the codes they have adopted due to a lack of staffing is part of it. The price of raw land is cheaper outside the city than it is inside the city,” Peterson said.
“And I don’t say all that to make excuses for us. I mean there’s things we need to do a whole lot better, but I don’t think you can just say it’s any one thing. I think it’s a combination of things.”
As mandated by the city charter, the draft budget for the 2020 fiscal year must be provided to the City Commission on or before May 7, or the first Tuesday of May, and it must be published in the Johnson City Press no less than three days prior.
In other business, Downtown Development Director Dianna Cantler presented commissioners with an overview of the Johnson City Development Authority’s accomplishments during 2018.
Among those were: Six facade grants, four tax-increment financing projects, two CO.STARTER cohorts producing three new businesses; 15 events hosted downtown and 54 events facilitated.
Cantler estimated more than 65,480 people visited downtown Johnson City for events, creating an estimated economic impact of between $250,000 and $450,000.
She also said the Johnson City Development Authority plans to re-present a tax-increment financing plan for the John Sevier Building to the Washington County Commission as early as next month. The County Commission already voted 7-7, with Chairman Greg Matherly absent, in February to reject the plan.