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Carbondale a bit short in sales taxes

By Blackwell Thomas, The Southern

Saturday, July 19, 2008 10:24 PM CDT

CARBONDALE - Carbondale's sales tax revenue for fiscal year 2008 fell short of projections by about $440,000, according to numbers from the city.

But thanks to healthy cash reserves and increased revenue from the city's home rule sales tax, which was increased by half a percentage point in January, City Manager Allen Gill said the gap is a manageable one and not cause for concern.

City financial planners predicted about $6.4 million in revenue while the actual receipts are closer to $5.95 million.

In an interview with The Southern, Gill gave the city a clean bill of financial health, despite the sales tax numbers.

"The city's budget is about $40 million," he said. "Carbondale has healthy reserves so, at this point, this is very manageable within our budget."

The reserves Gill spoke of sit in the city's general fund, which currently has a balance of about $6.7 million.

Gill said the city' s budget is not a static document and adjustments can be made throughout the year, as long as they don't call for more spending, which would take a vote by the city council.

Looking at projections and actual revenues dating back to 2006, Gill commended the city's financial department for its track record of solid financial forecasting.

"For this (fiscal year 2008) they put these numbers together about a year and a half ago," he said. "It's especially difficult today, with the economy and gas prices, to predict anything 18 months out into the future."

Friday, Council Member Lance Jack echoed Gill in saluting the city staff but said the national economy is slowing the local economy.

"I know we've got a great staff and every year they come back with such accurate projections and, had the economy regionally and nationwide held up, I believe our estimate would have been right on," he said. "We've got to look at the big picture with the entire national economy. I don't think we are in a unique situation here in Carbondale."

Jack did say he was optimistic that, because of Carbondale's role as an "economic center for Southern Illinois" the city would be partially insulated from the national economy.

Council Member Joel Fritzler said he was concerned by the gap and that the city's reliance on a sales tax (Carbondale collects no property tax) could make Carbondale vulnerable to a sagging national economy.

"It's manageable - for now," Fritzler said of the projected-versus-actual revenue gap. "I don't want to be pessimistic but I do want to be realistic. We don't know how the new Rural King in Murphysboro is going to affect us. I don't know if it's too early to tell what effect the Murphysboro Wal-Mart is having on us."

Fritzler added: "We are coming to the end of the first quarter for this (2009) fiscal year. We'll be taking another look at expenses and income for that quarter."

blackwell.thomas@thesouthern.com

351-5823