Mayor Marcus Stevenson's Monthly Message (July 2023)
Preparing for the Fiscal Year 2023-2024 Budget
It’s that time of year again when cities across the State prepare for a new budget cycle. This cycle, called a fiscal year, runs from July 1 to June 30 each year. As we go through this process and create our budget, it’s an opportunity to communicate the values of our city, guide its operations, and allocate resources. Preparing for this fiscal year has been especially challenging with inflationary pressures and an uncertain national economy.
One major budgetary challenge that Midvale faces, is that we rely heavily on sales tax revenue compared to other sources, such as property tax. This makes our budget more susceptible to economic downturns than communities with greater balance in their revenue sources. In fact, of our $25 million budget, property tax is estimated to account for about $3.1 million in the upcoming fiscal year, whereas sales tax is estimated to account for $10.7 million. Ideally, those two amounts would be similar, and the imbalance means that as we prepare for a potential recession, we need to budget as conservatively as we can because sales tax is directly impacted by the state of the economy. Because of this, we’ve estimated no new increases in sales tax and have decreased our budget by about 2%.
A Conservative Approach While Increasing Services
While our overall budget has decreased, that doesn’t mean we are not increasing services, but rather that we cut in other areas and prioritized what was critical.
The Unified Police Department (UPD) saw the largest single increase within our budget. It’s estimated that the member fee Midvale City pays to UPD will increase by about $600,000, meaning our overall member fee will be about $12 million and is roughly 48% of our budget. This increase represents the continued wage wars that we are seeing in public safety and includes a new sergeant position in our Midvale precinct to oversee the Direct Enforcement Unit (DEU). It is this unit that does special projects such as investigating crimes that may include nuisance locations, gangs, narcotics, traffic enforcement, and other situations.
In public works there are a couple of staffing changes. First, we are fully funding a parks and cemetery position. While this position was first added to the budget last year, it was only funded for the last half of the fiscal year. By fully funding this position, it will give the City the necessary help to continue our work to curb vandalism at our parks, provide more appealing park space, and maintain new park space in the Jordan Bluffs area. Secondly, we are proposing an additional full-time facilities journeyman. This employee will help maintain all city-owned buildings and grounds along with one other journeyman. The additional staffing will help complete major maintenance needs more quickly, which in turn can save residents money by preventing deferred maintenance that grows more costly overtime.
Lastly, in conjunction with Salt Lake County, we have been fortunate to receive a multi-year grant from the State of Utah which will fully fund hiring a full-time Communities that Care (CTC) Coalition Coordinator. CTC is a national, science-backed, data-driven program that connects community resources to each other. Midvale has many incredible non-profits that operate within our community, who help our residents, but unfortunately, they are not always connected to each other. The goal with a CTC is to identify community challenges, such as food insecurity or underage drug use, and to come up with a plan to address these most critical needs. The Coalition Coordinator will be charged with leading this effort.
Financial Impact on Residents
Even by increasing service levels and cutting the overall budget by 2%, we need to propose a 3.4% property tax increase. This increase of $7 per year on the average home will not only provide better service levels, but also help our budget stay current with inflation, help the imbalance we have in property & sales tax, and allow us to use the best financial practices by ensuring that we do not use one-time funds for on-going expenses. I would never count on birthday money to pay for my mortgage, and the city shouldn’t either. This change allows us to be more financially stable and responsible during a time when it’s essential.
While any property tax increase may initially sound like a lot, it’s important to keep in mind that this only applies to the Midvale City portion of your property tax bill, which is currently $208 per year on the average home. Further, it’s an important reminder that even with increased home prices, the amount that the city collects from property tax does not increase. As an example, if Midvale City collected $100 from your property taxes last year, then we will collect $100 again this year, regardless of any changes to your property value unless we go into the process to raise property taxes called Truth & Taxation.
I know that even a small tax increase is likely not what anyone wants to hear. I also hope that the average increase of $0.58 a month is well worth having a more efficient police department, long-term building maintenance cost savings, more clean and beautiful parks, increasing the effectiveness of our many non-profits, and helping to stabilize our city finances so that we can continue to deliver critical municipal services, even through difficult economic times.