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Orchard City anticipates lower tax revenues

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Orchard City's long-term financial outlook as described in the 2016 budget cites examples of declining revenues in some key areas.

However, balanced against that, the town's cash position and available funds and fund balances in budget accounts show a healthy underlying financial picture.

"Most revenue is expected to decline with a few large drops in certain sources," states an explanation note in the budget message.

Those declining revenues include past and expected future declines in receipts from the state gasoline tax, money which is used for roads; continuing declines in the mineral leasing and state mineral severance tax receipts; and a budgeted decline in the town's share of county sales tax receipts, money which comprises a large portion of general fund spending.

Declines in mineral leasing and severance tax revenues lead the declines projected in the 2016 budget. An overall decline in revenue from the state shows a big decrease -- from over $99,000 in 2015 to $38,202 in 2016. Of that amount, mineral leasing money declines from $41,485 in 2015 to $16,000 in 2016, and severance tax payments decline from $55,645 last year to $21,000 for the coming year in the general fund.

The minerals leasing and severance tax items in the budget are estimates provided by the state.

The budget notes that the town "has no control over these sources of revenue, and expenditures are budgeted with a conservative bias in order to protect the town resources for future years while providing quality service to our citizens."

Receipts from county sales taxes are projected to drop from $175,000 last year to $150,000 in 2016.

The budget document explains, "Budgeted expenses for 2016 will stay within the limits of the town's revenue and fund balances. It is very prudent to maintain a healthy balance in each fund which can be used for emergency expenses or to offset a decline in revenue. There are two funds with this exception as they do not support themselves and may require a transfer from the general fund."

Those two funds are the park fund and the road fund. "The road fund is no longer able to sustain itself with the declining revenue in [state gas tax] and interest earnings," states the budget message.

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