The Norman City Council will hear a cautious economic forecast during its regular meeting tonight for the city’s upcoming fiscal year budget.
The fiscal year begins July 1 and ends June 30, 2023, and the budget must be adopted seven days prior to the end of that year.
Projected revenues will total $251,829,357, and operating expenses will reach $244,287,073, a summary of income and expenditures reads.
“The [fiscal year-ending] 2023 budget is being prepared during a period of great volatility and uncertainty locally, regionally, nationally and throughout the world,” City Manager Darrel Pyle’s annual budget letter to the council reads. “As we have emerged from the Coronavirus 2019 pandemic, there has been a period of unprecedented growth in our local economy; growth trends that cannot be sustained.”
Sales tax revenue climbed to historic levels following several federal stimulus packages through Coronavirus Aid Relief and Economic Security Act and American Rescue Plan Act funds. Economic experts called the resulting boost to revenue as a “sugar high” with an inevitable correction.
The city’s sales tax revenue growth rate climbed by 20% in February 2022 according to the previous 12 months. The growth rate the following month however, was only 4.67% above January’s receipts.
City Financial Services Director Anthony Francisco advised the council to look to one-time expenditures rather than taking on new recurring obligations.
While the city didn’t take on new recurring expenses, the influx in sales taxes allowed it to take on projects like the Transit Maintenance Facility. The revenue growth also prompted discussion about using the excess revenue to give signing bonuses to new police recruits — Oklahoma City pays its new police officers a $5,500 signing bonus.
Pyle echoed Francisco’s concerns in his letter.
“Since such growth rates in sales tax revenue have never happened before, it is impossible to predict what will happen in the future,” his letter reads. “The City will maintain a conservative stance, with the impact being that critical services will be maintained, whether through continued revenue growth or through reducing the fund balances that were built up in [fiscal year ending] 2022.”
While Tuesday night’s study session is not open for public comment, two hearings have been scheduled at upcoming meetings.
The next hearings will be May 25 and June 14, when the council is expected to adopt the budget, City Clerk Brenda Hall said.
Mindy Wood covers City Hall news and notable court cases for The Transcript. Reach her at [email protected] or 405-416-4420.