Our View: Conservatism key to budget
September 10, 2011
As another local election cycle nears, it's worth applauding the Steamboat Springs City Council and city staff for their continued pragmatic and conservative approach to budgeting and fiscal responsibility.
Despite one of the worst economic periods in city history, our elected officials and top city leaders have demonstrated how government should function from a fiscal standpoint. While many municipalities and states across the nation have depleted reserves or run up deficits, Steamboat Springs has managed its budget as it should — by setting conservative revenue estimates and making necessary and appropriate spending cuts without significantly affecting the core services that keep our city and its residents functioning and safe.
The council's wise approach again was on display this past week when it suggested that Finance Director Deb Hinsvark revise her 2012 sales tax revenue projections to be 5 percent below 2011 projections. Hinsvark, who has impressed us in her role as head of city finances, had suggested 2012 revenue projections at 2 percent below this year.
The city projected 10 percent year-over-year sales tax revenue declines in 2010 and 2011 after an 18 percent decline forecast for 2009. Those conservative projections, coupled with cost-cutting measures like postponed projects, employee furloughs and reduced staffing, have resulted in annual revenue surpluses.
According to the Steamboat Springs Finance Department, sales tax revenues increased 3.4 percent in July from the same month last year, marking the third straight month that Steamboat sales tax collections have increased from the corresponding month in 2010. Collections were up about 7.5 percent in June and nearly 2 percent in May.
The city collected $1,512,460 in July 2011 compared with $1,462,498 in July 2010. That brought year-to-date sales tax collections to more than $10.2 million — compared with nearly $9.9 million by this time in 2010 — which translates into a year-to-date increase of 3.25 percent.
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This summer's increases in tax receipts could tempt city leaders into loosening the constraints on the budget. But they've wisely chosen to plan for hard times and make prudent decisions about how to spend any excess revenues that materialize.
By deliberately underestimating revenues, City Council has had the luxury of revisiting its unfunded budget requests in midsummer and using sales tax receipts that exceed the budget to act on supplemental budget requests. That gives the city the flexibility to absorb the additional cost of removing snow from city streets in a record winter, for example.
No matter how individual council races are decided come Nov. 1, it's appropriate to thank the current council for its effective fiscal leadership.
We would urge the next council to follow in the footsteps of the current council when it comes to fiscal policy.