The City of Topeka Finance Department has posted the 2022 Proposed Budget on the City of Topeka website. The 2022 budget city-wide expense is $339 million. It is the ninth 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. The 2022 Preliminary Budget supports the budget priorities 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 $98.1 million, a 2% increase. The 2022 Preliminary Budget is available on the City of Topeka website, with the City Manager’s transmittal letter beginning on page 3: https://www.topeka.org/finance/budget/.
New this year is an interactive budget presentation which will debut to coincide with the Governing Body’s budget work session on Saturday, July 10 at 9 am. The site will be available at https://TopekaKS.opengov.com
Expenses exceed the revenue in the Stormwater Fund due to work delayed in 2020 because of the COVID-19 public health emergency. The expected $1.2 million revenue shortage is covered through the use of reserves.
The preparation for the proposed budget was made more challenging due to the quick interpretation and implementation of Kansas Senate Bill 13 and House Resolution 2104. These bills now require the Governing Body (GB) to provide an affirmative vote to exceed the Revenue Neutral Rate (RNR) amount from the prior year, regardless of tax base activity. Therefore, the GB must now vote to allow the City’s budgeted property tax revenue to capture tax base growth. In addition, the COVID19 public health emergency has made relying on historical comparisons less helpful.
Budget Highlights:
- The General Fund (GF) revenues included in the FY22 Proposed Budget assumes that the GB will vote on July 13 to hold a public hearing in September to consider surpassing the RNR. If the GB decides not to conduct a public hearing, the budget must be adopted and submitted to the County by August 20.
- Personnel-related expenses represent the largest portion of the General Fund at $76.8 million, or approximately 78% of total expenditures. Personnel costs, including wages and benefits, increased $454,000, or 0.6%, over the 2021 Adopted Budget. Personnel costs include finalized union contracts and assumptions regarding negotiations in progress and a 1% wage increase for non-union staff.
- Property and sales tax collectively make up 64% of the General Fund’s revenue, 30% and 34%, respectively.
- The total proposed revenue reflects 2% growth over the FY21 Adopted Budget. Property tax growth is due to the growth in the City’s tax base. Sales tax is budgeted to be 10% higher than the FY21 Adopted Budget and 5.3% higher than FY20 Actuals. The FY21 Adopted Budget was developed during the unprecedented period following the public health emergency declaration when significant uncertainties loomed over national and local economies. However, the local economy proved to be far more resilient than initially anticipated. As a result, the current FY21 sales tax projection reflects a higher year-over-year growth. The FY21 Proposed Budget assumes that FY21 will reflect a 3% drop compared to FY20 and that FY22 will grow 2.9% from the revised FY21 expectations. The largest growth area is expected to occur in the compensating use tax category due to more online transactions and more active collection of this revenue by the State.