The finance department for the city of Branson is working to find ways to trim a projected $1.2 million general fund deficit for the 2022 budget.
Branson Finance Director Jamie Rouch and her staff will be working out the final budget for 2022 during a series of meetings through the end of September.
“Right now, we are not able to balance operations in the general fund,” Rouch told Branson Tri-Lakes News. “We’re still in the budget process, and we still have a couple meetings, so those will all take place before the budget is finalized. But, as of right now, revenues and expenditures have us upside down $1.2 million.
“We’re not 100% sure how we’re going to handle it.”
Rouch raised the budget’s current state and the possible general fund deficit for 2022 during the city Finance Committee meeting on Aug. 26.
“In the past, many of you who have been on this committee for quite some time, you have heard me say we have a long-term problem in that if you look at this, we’re upside down at this here, and we have to find a way to fix that problem now so we don’t get there,” Rouch told the committee. “Well, guess what? We’re there. I’ve been here for 13 years, so in the past we’ve been able to say for this year we can do this, we can do this, we can actually get your revenues and expenditures in balance for this year.
“But next year, here’s the assumption: it’s going to take for the next five years to balance your operations,” Rouch continued. “I’ve also said many years in a row, those assumptions are not realistic. So even though we’ve come up with these assumptions, and ways to balance your operations, you cannot sustain a 0% expenditure increase. Your expenditures grow. You have to look at inflation, consumer price index, and all of those things. It’s something that’s not realistic but it’s what we’ve had to do in the past.”
Rouch also told the committee staff issues will factor into the budget going forward.
“It’s not sustainable to say we can’t increase payroll by even 1% and it’s what we’ve had to do for those assumptions in the past just to make the future work,” Rouch said. “This year, we have hit a brick wall because we have spent a lot of time looking at it, and I’ll tell you this, the department heads have nowhere else to trim. We have gone through those budget meetings. Their operations are already, in my opinion, bare.”
Rouch indicated to Branson Tri-Lakes News she’s not pleased with the current situation.
“I don’t like to present an unbalanced budget,” Rouch said. “That’s what I was talking to the finance committee about... to tell them we need to start thinking about ways to get this budget balanced and how do we do it? The departments are all very good at looking at their expenditures, and we’ve gone through all the meetings with our city administrators, and frankly, there’s not a lot of places to cut.”
Rouch said she wanted to prepare the Finance Committee for the real state of the city’s budget in hopes they will be able to have productive discussions when they meet. She stated in past budget discussions the members of the committee have raised substantial questions and issues to assist budget planning.
Rouch also addressed comments she made at the committee meeting regarding a request from several members about how it would impact the general fund if they increased the subsidy from the general fund into the public safety fund by 5% annually.
“If we have to do it,” Rouch said. “It will cause a much larger problem for the general fund.”
Rouch cautioned members of the public who may look at the city’s balance sheet and see an overall surplus who may think it’s no big deal to run an unbalanced budget to realize that similar to a household budget, the general fund surplus is there in case of emergencies.
“The problem is you should not use your reserve to balance your operations,” Rouch said. “It’s for one-time items.”
Rouch said a number of factors are coming into play when it comes to the projected deficit. While many will look at COVID-19 and the problems were caused by the pandemic, it was not the biggest factor impacting the city budget.
“Certainly, COVID didn’t help things at all, but it is not the only problem,” Rouch said.
She said city revenues aren’t enough to sustain current growth rates of expenditures.
“The expenditures grow because that’s economics,” Rouch said. “You look at the 3% or 5%, the GDP, the CPI, even if we didn’t do anything different, your expenditures are still going to grow. That’s the problem. Our revenues, speaking for the general fund, are not enough to keep up with the expenditures growing.”
Rouch said the services being offered by the city are going up in expenses as the U.S. economy continues to see price increases on items like gas or construction supplies needed by public works.
“It’s not that we’re spending on more stuff,” Rouch said. “The expenditures we have now are going to continue to go up. If our revenues are continuing to go up at 1% and our expenses are going up at 3% or 5%, it’s not going to work.”
Rouch said they have been budgeting conservatively, estimating the projected sales tax would return to where 2019 was before the pandemic, but the other areas of revenue are at a 1% increase.
“It helps us from going backwards,” Rouch said. “It helps us go forward.”
Rouch said she and her team are dedicated to transparency and it’s why she’s talking about the potential problems before the city.
“We want to do whatever we can to show ahead of time so when we come together for [finance] meetings we have good conversations,” Rouch said.
Rouch said a good way for residents to understand what she and her team are doing is to think of their household budget and the struggles they’re having right now with an upturn in prices on items like food.
“All households are struggling right now,” Rouch said. “Look at what our businesses are having to pay just to get people to work. Which then, you see servers and others making $15, $16 an hour, it’s quite a big jump for the economy. Then businesses have to raise prices to afford [the wage increase.]
“If the salaries don’t get raised, people can’t even afford the cost of living. It’s kind of an ugly circle.”
Information about the city of Branson’s Finance Committee meetings can be found on bransonmo.gov under the “government” tab. Rouch stated that meetings will be taking place on Sept. 17, 23, and 30.