City's general fund "sucking wind"

Sales tax, road use tax suffering


FORT MADISON - Fort Madison is staring at a $200,000 dip in the general fund balance compared to last year, due mostly to a drop in sales tax proceeds.

Fort Madison City Manager David Varley told the Fort Madison City Council that the general fund balance is “sucking wind” with about four months remaining in the fiscal year.

“The balance of our general fund is down about a quarter of a million dollars or 22% and we don’t like to see that trending downward,” Varley said.

He said the state hasn’t provided any information or data as to why the sales tax numbers are trending down substantially for the city.

“I don’t know why. I’ve heard some cities are down. I checked with Mt. Pleasant today and they are right where they expected to be and Burlington is down, so it’s a mixed bag,” Varley said.

He said that kind of hit will be tough for the city to absorb.

“If that continues through the following year, you’re looking at serious repercussions. The state has not been able to shed any light on it. It’s certainly not good news, so we're watching every penny we spend carefully because everything adds up.”

The city is also seeing a drop of about 5% in the Road Use tax fund or about $46,000.

A bright spot includes the city’s Hotel/Motel tax being up about 4%.

But he said all eyes are on the sales tax.

“The one we are worried most about is sales tax for the month. It was down 30% last month and year-to-date we’re down 27% from where it was last year, which is a little over $300,000.”

He said the city has been down the first six of eight months of the fiscal year.

“I don’t think we make that up, so it’s reasonable to expect we could take a $200,000 hit to sales tax, which hits the general fund, which means every single penny we spend we need to watch,” Varley said.

“If we end the year $200,000 less than what we planned, that’s a huge hit. That’s half our parks' budget right there."

Fort Madison Mayor Matt Mohrfeld asked Varley is the city’s franchise tax could have hurt the sales tax proceeds locally.

Varley again said the state has not been able to provide any information or data to explain why the city’s revenues are down substantially, and that includes the impact of the franchise tax.

Fort Madison, City Council, budget, dip, revenues, expenses, Pen City Current, news, David Varley,


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