NEBRASKA CITY – With Nebraska City sales tax teetering on falling below budget for the first time since voters approved the tax in 1987, City Administrator Perry Mader announced Monday $350,000 in proposed spending reductions for next year’s budget.

With two months remaining in the fiscal year, Nebraska City is $460,000 below budget on sales tax. Sales taxes collected have been down in six of the last eight months. The September tax collection is  typically a strong month for Nebraska City because of the AppleJack Festival and fall tourism season, but came in about $100,000 lower than previous year.

Amy Allgood, executive director of Nebraska City Tourism and Commerce, said the number of people coming to events like the AppleJack Festival is steady, but they are buying less.

 

She said it's a sign of the economy.

"The people are just not buying as much when they come through.  I don't know how to fix that."

Allgood

 

She said retailers from the orchards to downtown boutiques are reporting a decline in sales per transaction.

Allgood: “The tourists are coming for the family experience, like the parade, and they are making purchases. They are buying one thing at an orchard and one thing downtown, rather than two or three things. The cash registers are ringing, but they are just not buying multiple things.”

Mayor Bryan Bequette said the city ended its budget meetings with department heads in July facing an unusual situation where the forecasted sales tax is below the forecasted property tax asking of $2.9 million.

Of the $2.9 million, $900,000 would go to repay bonds and $2 million would go to the operating budget. The $2 million proposed is $700,000 higher than property taxes budgeted last year. The cuts announced by Mader on Monday would bring that number down to the $400,000 range.

Mader told city commissioners that he and Finance Commission Cole Sharp “went back to the drawing board” and were relieved to find that health insurance rates came in a little lower than expected. He said the city will also save $27,000 on the new pumper truck for the fire department.

 

Mader: “We did,  kind of,  caution council and staff that there might be some additional cuts, so we kind of went after it. We didn’t get painfully surgical, but we did go through every item more than once, several times.”

The remaining of the $300,000 reductions came primarily from adjusting the cost of living wage increases to 2 percent and a reduction in overtime pay.

Nebraska City’s spending on wages increased by $610,000 in the 2024 budget cycle. Nebraska City’s starting wage for a police officer went from $21 an hour to $27 an hour and there was a 4 percent wage increase for some other city employees. Last year the city paid for the wage increases with cash reserves, but does not expect excess reserves this year.

City officials said the higher wages were needed to fill open positions on the police force and rescue squad. Full staffs are expected to lower overtime pay.

Mader: “Depending on which scenario … we talked about putting some property tax back in. We could balance the budget.”

“Unless we cut more, this will be the first time when our property tax ask is going to be larger than our sales tax.”

Bequette

 

Mader said uniforms and vehicle maintenance could be deferred. He told city commissioners the subsidy for the rescue squad could be “zeroed out.”

Bequette said he expects to call a special budget meeting  prior to the public budget hearing in September.