Income sources are insufficient and further decreases in revenue are expected.
With that dire prediction, City of Cody leaders are asking voters to approve a fifth-cent optional general purpose sales tax for the next four years.
Unlike the specific sales tax Park County voters approved in 2016 with a $13.67 million countywide cap, a general purpose sales tax continues for four years regardless of how much revenue is collected.
In a 6-0 vote Tuesday, with councilman Glenn Nielson absent, the city council passed a resolution supporting an optional 1% sales and use tax to maintain public services at a time when revenues have decreased and costs increased.
For the issue to go on Park County’s 2020 general election ballot, two of Park County’s three municipalities and the county commissioners must support the initiative.
General purpose tax revenue may be used for day-to-day operations, Barry Cook, city administrator, said at the council meeting.
Whereas specific purpose tax monies pay for certain capital construction projects, general purpose sales taxes can go toward general operations such as parks and recreation, law enforcement, streets and administration.
With declining mineral revenue and COVID-19’s negative impact on tourism, economic forecasts statewide are increasingly dire. In its proposed budget, Cody’s city council is expecting nearly a 20% drop in revenue. City officials say without the optional penny tax, Cody people can expect slower service and, in some cases, no service in the coming 2020-21 fiscal year that begins July 1.
Cook said Park County, Powell, Meeteetse and Cody officials met at City Hall on May 6 to discuss optional taxes.
“Everyone in the group agreed this needs to be done,” he said. “All four parties agreed we need to put it on the ballot.”
After debating whether to go with the general or specific 1% optional tax, he said they all decided to go with the general tax.
State statute allows counties to implement up to 2% in general or specific purpose optional sales and use taxes in addition to Wyoming’s 4% statewide sales tax.
Council president Landon Greer said his vote to support the resolution does not mean he supports the 1-cent optional sales tax.
“But I support putting it on the ballot so voters can decide whether this is something the community needs,” he said.
Jerry Fritz, councilman, also said the public should make the decision.
While state law would not require the city to tell citizens how it would spend general purpose sales tax revenue, Cook recommended the city council do so.
In separate action Tuesday, the Cody City Council approved on the first of three readings a proposed fiscal year 2020-2021 budget that reflects a city-wide revenue loss of 17%.
The city anticipates having $31.68 million in revenue available in all accounts combined, including utility accounts, and $28.22 million in cash reserves in the coming year. Expenses are estimated at $36.38 million. Of that, general fund expenses drop from $10.31 million in the current fiscal year to $9.29 million for FY 20-21 that starts July 1.
The proposed budget takes $511,259 from general fund reserves to balance the budget.
In her report, finance officer Leslie Brumage said the most significant reductions in revenue are those that support general fund operations, including:
• $840,000 less in intergovernmental revenues such as sales and use taxes, cigarette taxes, gasoline taxes and lodging taxes.
• $80,500 less in charges for services mainly received from recreation center memberships and program registrations.
Expense reductions in the general fund account for $1.1 million of the change. They include:
• Deferring and rescheduling capital improvements and purchases.
• Not filling vacant positions and suspending the merit pay program for eligible employees.
• Reduce assistance to Forward Cody, Yellowstone Regional Airport and Cody-Yellowstone Air Improvement Resources.
• Cancel ongoing maintenance contracts and defer adding money to the vehicle replacement fund.
“If revenues decline more than we have anticipated, additional cutbacks will need to be considered,” Brumage said.
This would mean possibly eliminating recreation programs, changing rec center hours, reducing park services such as closed restrooms, fewer flowers and less frequent grass mowing, and closing city facilities sooner.
“We’re hoping revenues come in at least what we expect,” Brumage said, adding if there’s less revenue, then more cuts are needed. “We’re hoping we’re being overly cautious.”
Councilwoman Heidi Rasmussen said after three days of tough budget work sessions, she was not sure she could support the budget.
“Your city staff does a ton with a little,” she said, speaking to the public. “You will soon know they are doing less. It’s gotten to the point you’re going to see it.”
Addressing the budget’s lack of employee merit pay, Rasmussen said, “That really bothers me, to tell employees they are not getting a cost of living increase and (extra) pay for doing a good job.”
Closing out the discussion, Mayor Matt Hall said, “I hope our community’s paying attention.”