Tuesday, July 7, 2009

Roanoke City’s “Rainy Day Fund” May Get a Dip with Worsening Economy

Web Money_FlysSales tax is lagging more than expected. The state of Virginia is expected to filter down the shortfall to localities in the coming year. Not good news for Roanoke City says Director of Finance, Ann Shawver.

Shawver expects that for the 2009 fiscal year they will have to dip into the budget stabilization fund. Sales tax revenue is down 16% in April compared to last year at this time – she is “not liking the trends at all.” In February 2009 the budget shortfall was reduced from $3.8 million to $2.7 million but things have deteriorated since then.

Economists say that in the 3rd quarter of 2009 the economy will get better, said Shawver. The State sees a 9.3% decrease in revenue from last year. State Budget revisions and locality expectations in 2010 need to be 5-10-15% less. It will “trickle down” to localities warned Shawver and “its not over yet ,,, it will get more difficult.” She will know more when Governor Tim Kaine makes projections on August 15th.

The Civic Center subsidy continues and is above expectation due to a slow April and May and the economy. June is expected to be better. The Market building subsidy is also increasing due to the loss of several more tenents.

The Pension Plan declined 26% from last year but the good news said Shawver is that it was up 5% in May.

Shawver then broke to Council that in 2010 there is “potential for worsening revenue from the State – we are not through the downward trend.” For 2009 “we’ll have to curtail expenditures and we will need to dip into the Reserve Fund to make ends meet.” 

Posted By Valerie Garner

Categories: Finance, Roanoke City Politics

Tags: , , ,

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