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Midway through Ashland’s annual spending cycle, the town’s spending is in line. Revenues, however, are proving harder to predict.
In his report to town council Feb. 5, Josh Farrar, deputy town manager/finance director, said expenditures are on budget while revenue projections continue to rise and fall.
“As a theme, the expenditures were on track. It’s a good thing I don’t really have very much to report,” Farrar said. “Everything looks in line at this point.”
On the revenue side, first quarter projections showed a rise in business licenses. The anomaly was due to several of the town’s larger businesses filing extensions, Farrar said.
Sales tax proceeds look strong, Farrar said, crediting an improving economy and noting that he expects a surplus of those revenues. However, a change in how sales tax is calculated could affect how that budget line appears going forward. At worst, Farrar expects the town will break even.
“The bad news is, as we go through the budget process the means that we [use to] calculate sales tax is going to change as of next year, so that will go down,” he said. “But, at least the economy’s bringing that number up, so it should offset that change in methodology.”
Cigarette tax proceeds are not as strong so far this budget year, but Farrar said they are difficult to project.
“It’s a very haphazard way that the money comes in,” he said, adding that this line item could balance out eventually.
The town’s Capital Project Fund shows an increase due to the sale of town property to Chick-Fil-A, Farrar said. Personal property bills went out earlier this year, so those proceeds are up as well.
Current real estate estimates are based on billing. Farrar said that the town “doesn’t really get to see a good picture” of its real estate revenues during the first and second quarters. The current estimate of 9 percent collected is historically low, he said.
Lodging revenues continue to fall, a trend that was projected in this year’s budget.
“We’re still in line with the budget but the actual collections are down from previous years,” Farrar said.
In response to a query from Councilman Edward L. “Ned” Henson III, Farrar said the drop is likely driven by competition along the Interstate 95 corridor.
“I would dare say that we’re losing it to our neighbors, especially because it’s our closest neighbors that are developing new product,” he said.
Fine and forfeitures are also down so far this year, which Farrar said isn’t necessarily a bad omen.
“Chief [Douglas Goodman] just has the streets much safer, people are not committing crimes, so we’re taking in less revenue,” Farrar said.
“I hear DUIs are up,” Mayor Faye Prichard responded, referring to an earlier presentation by the chief.
Farrar said he has begun the process of looking into the town’s next budget and expects to see “upticks” of revenues going forward.
Town council next meets on Feb. 19, 7 p.m. at town hall.