Wednesday, April 24, 2002
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Wednesday, April 24, 2002 |
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Hotel-motel collections increasing for PTC; but other budget items rise, too By JOHN
MUNFORD
Revenues from the city's hotel-motel tax have picked up significantly, according to numbers back from the first half of Peachtree City's fiscal year. The hotel-motel tax shortfall has shrunk from its original projection of 37 percent to 17 percent, equivalent to $73,000. This was a major concern for the City Council due to the nationwide tourism decline after the terrorist attacks of Sept. 11. But with other budgetary problems cropping up, city officials want to maintain the $834,000 of "impounded" funds from this year's budget. In a memo to the City Council, Finance Director Paul Salvatore said revenues from interest earnings could create a $200,000 shortfall by the end of the year. At Thursday's council meeting, he said other items likely to come in over budget include the city's health, dental and worker's compensation program, due to a higher number of claims so far this year. The city's pension plan also needs an extra $153,000 this year, mainly due to the downturn in the stock market and also due to an increase in the number of participants and their salaries, Salvatore said in the memo. The city can also expect a significant increase in its property insurance premiums, Salvatore told council. Another reason to keep the impounded funds is that the city doesn't yet know the impact of the recent sales tax holiday, which waived the state-collected sales tax on a number of purchases for two days, Salvatore said. That also diverts the city's portion of those sales taxes, which is expected to have some affect on projected sales tax revenues. Most of the anticipated shortfalls may be cancelled out by staff savings from position vacancies, but that would negatively affect next year's budget, Salvatore warned in the memo. The majority of the hotel-motel tax revenues are diverted to the city's Airport Authority, which operates Falcon Field, and Development Authority, which operates the city's tennis center and amphitheater. Both authorities have agreed to hold back funds until the end of the fiscal year to help the city recoup any shortfall in the hotel-motel tax collections. The City Council also raised the hotel-motel tax rate from 5 to 6 percent to offset the predicted shortfall; it will be lowered back to 5 percent once the numbers are back to normal.
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