City releases five-year financial forecast
City Press Releases, Economic Development
June 22, 2018
The City of Pittsburg’s financial outlook is strong, according to its Five-year Financial Forecast published this week. The forecast, which is based on recent and historical trends, projects healthy increases in sales and property tax revenues, as well as healthy savings in the City’s general fund operating reserves.
The forecast is prepared each year and helps inform decisions to ensure financial stability, safeguard the City’s ability to provide essential community services, and assists the City in policy decisions.
“We need to find ways to not just overcome, but to thrive,” says City of Pittsburg Finance Director Jamie Clarkson. “A long-term financial plan is an important tool that can assist in accomplishing this goal.”
The four main sources of revenue in the City’s general fund are sales tax, property tax, franchise tax and public utility transfers. The opening of the Kansas Crossing Casino in 2017 added casino gaming revenue to the list of funding sources, which go into general fund. The casino and hotel complex also added to the City’s total assessed valuation. Of all the City’s revenue streams, sales tax, property tax and gaming revenues show the most growth.
The overall sales tax rate in Pittsburg is 9 percent, with 6.5 percent going to the State of Kansas, 1 percent going to Crawford County and 1.5 percent going to the City of Pittsburg.
The financial forecast shows City sales tax revenues increased by 5 percent from 2016 – 2017, and these revenues are expected to grow an additional 2 percent in 2018. The City estimates another 2 percent increase for 2018 – 2019, and the projections for 2020 – 2022 include a 1.5 percent increase per year.
Taxable retail sales in Pittsburg hit the highest level ever recorded in 2017, indicating strong economic growth in the region.
The property-assessed valuation is completed each year by Crawford County, and along with the mill rate determines the amount of property tax revenue the City can levy.
Property tax valuations remained relatively flat through 2017, but increased by 6.8 percent in 2018, primarily due to the Kansas Crossing Casino and Hampton Inn Hotel. Pittsburg’s assessed valuation for 2019 shows another 1.6 percent growth due to construction and increased values throughout the City.
The City receives 1 percent of the gaming revenues generated by Kansas Crossing Casino, in addition to property taxes and utility charges for service. In 2017, the City received $201,000 in gaming revenue from the casino. City staff estimates $325,000 in gaming revenue will be collected in 2018, and $335,000 in revenue for years 2019 – 2022.
Increased revenue streams have resulted in positive savings to the City’s operating reserves. These reserve funds provide options for the City to respond to unforeseen risks, expenses or economic downturns. The City’s goal is to maintain 16 percent or two months of expenditures in fund reserves.
Thanks to the growth in property and sales tax collections, reserve levels are improving. While the general fund did not meet the reserve goal in previous years, the City is projecting that reserves will meet the goal of 16 percent in 2018.
The entire five-year financial forecast, which gives a comprehensive look at the City’s financial projections, is now available on the City’s website at https://www.pittks.org/city-government/finance.