The Town of Parker adjusted its budget for the second time in response to a continuing decline in the growth rate of sales tax revenues. The town reduced its 2018 expenditures by an additional $2 …
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The Town of Parker adjusted its budget for the second time in response to a continuing decline in the growth rate of sales tax revenues.
The town reduced its 2018 expenditures by an additional $2 million. The motion was approved at the July 16 town council meeting. Reductions were made across all departments, according to the town's website.
“While we had seen a slight decline in our sales tax growth in each of the past two years, the rate of decline has been more pronounced since the 2018 budget was developed in the middle of 2017,” wrote finance director Mary Lou Brown in an email.
Brown wrote that the first budget adjustments in May were made to reduce the 2018 budgeted growth rate down to the actual level of 2017 growth.
“As this year has gone on, we have seen further declines in sales tax revenue growth contributing to the second 2018 reduction,” she wrote.
Most of the town's general fund, the town's primary operating fund, comes from sales tax revenue, Brown wrote, which includes police, public works, parks and recreation and support service like finance and human resources. She added that every department has reviewed its operating budgets and made cutbacks accordingly.
Mayor Mike Waid said the decline in the growth rate of sales tax revenue is related to people choosing not to shop in the town's retail establishments or dine at local restaurants. He said he believed the reason is that some residents choose to shop online versus in town. Brown agreed and added that more retail and dining options being offered in surrounding areas has also contributed to the decrease.
Waid said the budget adjustment is something the town does occasionally to make sure the budgeted amount aligns with the amount of revenue available.
“This is just part of business operations,” he said.
Every year the mayor creates a “mayor's challenge,” which is a specific intiative the mayor will take charge of and market to residents. This year's challenge is called Choose Parker, encouraging residents to shop and recreate locally rather than choosing to go elsewhere. He said this year's mayor's challenge was unrelated to the decline in the growth rate of sales tax revenue.
Brown said the data from the past few years is too little to determine a trend in the local economy.
“Swift changes in historical trends and activity levels during the last half of the current year will be difficult to adequately reflect in the development of the next year's budget,” Brown said.
“We will continue to monitor our financial data to see if this is going to be a trend that will continue to have long-term effects on our budget.”
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