Town takes cautious look at budgets on the horizon

 On Monday, town commissioners heard more about the effects of the COVID-19 pandemic on the next budget.

And the budget after that. And the budget after that.

One of the town’s immediate concerns is a state appropriation of about $2 million. Though included in the Legislature-approved $93.1 billion budget, the money for continuation of a sea-level rise study and a smart-city initiative that would link elements of the town digitally has yet to be signed off by Gov. Ron DeSantis. 

Additional concerns focus on dropping levels of such revenue sources as the town’s share of gas taxes, sales taxes and other  budget line items. 

Not of immediate concern is property tax revenue, which comprises about 75% of the general fund. The 2021 budget is based on property values established on Jan. 1, about two months before pandemic effects took hold. 

The town is initially forecasting a 1.5% gain in property values townwide, though more accurate estimates and final figures are due in June and July.

Other revenue streams may be more immediately impacted by the pandemic. Gas taxes, for example, are forecasted to drop about $76,000 (19%) for 2021. Other revenue streams, like sales taxes, could be similarly affected.  

“So I am continuing the COVID-19 adjustments [through fiscal year 2022],’’ Finance Director Sue Smith said. “We’ll just have to — again this is very high level — have [a] wait-and-see approach on the gas taxes.”

Town Manager Tom Harmer said the fiscal year 2022 budget will rely on property values that will be established 10 months after the pandemic began.

“It’ll be interesting to see what values the property appraiser comes up with because all of that was pre-pandemic,” he said. “Next year when we start talking about fiscal year 2022, we’ll be talking about the values next January.”

Earlier this month, Harmer mentioned sources of funding to offset Longboat Key’s losses. 

The offsets include $100,000 from red tide contingency funding, $182,860 from a fund set up for Town Commission contingencies, a $100,000 potential surplus from legal spending and some FEMA reimbursement.

The town also maintains a $1.3 million emergency fund, and the possibility of new sources of revenue are on the horizon.

“We are looking at some current grant opportunities related to COVID-19 that kind of popped up in the last 30 days or so,” Harmer said. “They may not relate specifically to these projects, but they can offset some of our other costs.”

Commissioner BJ Bishop asked Harmer if he’s heard anything from Tallahassee on budget amendments because of COVID-19 issues. In addition to lower-than-expected sales tax and gas tax collection, the state has spent more than expected on COVID-19 related projects.

Some of the town’s budgeting could be affected based on what DeSantis decides to veto. 

The Legislature approved about $2.1 million for a pair of town projects in the most recent session, about $142,000 for completion of a study of sea-level rise’s possible effects on town infrastructure and about $2 million for the town’s smart-city initiative.

“Some of the buzz I’m hearing out of [Washington], D.C., is they’re not optimistic that Congress is going to move forward with additional funding by their July 4 holiday,” Bishop said. “I hope that’s not the case, but it certainly could have a significant impact on the state and to a lesser extent our budget.”

Harmer mentioned DeSantis could also make cuts to the state’s  budget if federal support dips.

Longboat Key Mayor Ken Schneier said he’s spoken with several mayors throughout the state, including Sanibel Island.

Schneier said Sanibel is projecting about an $8 million shortfall toward its general fund budget of about $25 million, though it relies heavily on tolls and fees.

“I just thought it was an interesting way to look at how different communities that seemed very similar on the surface can have dramatically different impacts in this,” Schneier said.