Eagle has the kinds of problems most towns want in the COVID-19 era.
Like all governments, Eagle’s tax revenue is taking a beating — forecast to drop 21% this year. Unlike many governments, Eagle’s actual budget cuts will be relatively thin, the town council learned in a budget work session.
A combination of conservative budgeting and an upswing in tax revenue late last year will make cuts less draconian.
“The town of Eagle has been investing in its future for the last decade,” Eagle Town Councilmember Matt Solomon said.
Eagle’s budget by the numbers
For now Eagle is projecting its general fund sales tax revenue will be down 21% from last year. That means the Town Council needs to find $1.5 million.
Councilmembers know right where to look and they won’t have to look far.
The Eagle Town Council projected 2% sales tax growth in 2019, but ended the year on a strong upswing partially because the town started collecting sales taxes for online sales, according to the town’s financials.
Because of conservative budgeting and those unanticipated tax revenues in 2019, and because officials were already preparing for an economic slowdown, the town has “a very healthy general fund balance,” Town Manager Brandy Reitter said.
In other words, officials have some extra money in the bank.
Eagle’s policy is to keep 25% of its annual operating expenses on hand. Because the town did not spend some of the money it had planned to, and because it saw some tax revenue it had not planned on, the general fund balance is 37%.
So, councilmembers will find their $1.5 million in at least three ways:
- They won’t transfer $750,000 transfer from the general fund to the capital improvements fund, and they’ll postpone some projects and events.
- They’ll use $500,000 from their fund balance.
- They’ll still have to cut $250,000 from the general fund budget.