The City of Topeka Finance Department has posted the 2021 Preliminary Budget on the City of Topeka website. The city-wide 2021 budget is $312.6 million and the seventh consecutive budget proposal that has not included an increase to the property tax mill rate. The ability to continue to provide the current service levels while not increasing the City’s largest revenue source becomes increasingly challenging. City-wide, the budget proposes to eliminate 32.5 full-time equivalent positions when compared to the 2020 Adopted Budget along with other non-personnel related expense reductions. The 2021 Preliminary Budget continues to support the budget priorities that were established by the Governing Body – investing in infrastructure, continuing commitment to public safety, continuing a commitment to developing neighborhoods, selected strategic investment toward quality of life and improving fiscal sustainability.
The General Fund budget is $96.2 million, a 0.3% decrease. The City began the 2021 budget process with an estimated operating deficit of more than $5 million in the General Fund. To close this gap, both personnel and non-personnel related reductions have been proposed. The 2021 Preliminary Budget can be viewed on the City of Topeka website, with the City Manager’s transmittal letter beginning on page 7: https://www.topeka.org/finance/budget/
Budget Highlights:
- Personnel related expenses represent the largest portion of the General Fund at $76.5 million, or approximately 79% of total expenditures. Personnel costs, including wages and benefits, increased $360,000, or 0.5%, over the 2020 Adopted Budget. Such personnel costs include finalized union contracts along with assumptions regarding negotiations in progress, as well as a 1% wage increase for non-union staff.
- Property and sales tax collectively make up 61% of the General Fund’s revenue, 30% and 31% respectively.
- Property tax is budgeted to increase over the 2020 Adopted Budget by $1.1 million, as the City has experienced strong assessed valuation growth ($33.76 million or 3%) compared to the prior year. The strong assessed valuation growth allows the City to capture additional revenue as more taxable value has been added to the tax rolls while keeping the mill levy rate the same.
- Sales tax projections reflect a 3% decline over the 2020 Adopted Budget as the long-term economic impact from the current public health emergency (COVID-19) is still being evaluated.
- A reduction in interest income of $536,000 has also been projected in the General Fund, reducing the budget to $268,000 as interest rates are expected to remain below historic averages.
- General Fund departments were asked to identify budget reduction options totaling at least $5 million while also providing feedback on any potential service reductions. Various reduction scenarios were presented to the City Manager for his review. The reductions that have been included in the budget were difficult decisions made after thoughtful consideration. These reductions are likely to place additional strain on staff as responsibilities are shifted and prioritized.