Revenues Promising as Lexington City Council Undertakes Budget Review
In a promising turn of events, as the Lexington City Council set about reviewing the budget for the upcoming fiscal year, the income aspects look positive. This development comes in the wake of a thorough assessment of city finances conducted last week by Urban County Government Finance Commissioner Erin Hensley, on the eve of the Council Budget Committee’s review of Mayor Linda Gorton’s suggested budget.
A Return to Normalcy Anticipated
In her summary, Hensley drew attention to the expectation of a moderate growth in income. “Traditionally pre-pandemic, our revenue growth was about three or four percent. We’re actually expecting about six percent next year which is still strong for us, but not the eleven-twelve percent that we’ve experienced over the last couple of years. So, we’re really returning to our normal course of business,” said Hensley.
Hensley also stated that around $33 million in 2024 resources can be integrated into the next budget. However, it was stressed that the federal COVID recovery funds cease to exist and the cost of borrowing is witnessing a trivial decline. This data will guide the Council in its decision-making process regarding the new budget in the forthcoming months.
Revenue Growth Versus Population Growth
Vice Mayor Dan Wu, posing a hypothetical example of population growth, inquired if there is any correlation between population increase and cash flow into the coffers. “If our revenue is going up by six percent and our population growth is also going up by six percent then we’re kind of on the even keel. Versus let’s say our population growth was at three percent, our revenue growth is at six percent, to me that would say we have increased profits, increased payroll, right?” questioned Wu.
Responding to this, Revenue Director Wes Holbrook echoed some agreement but pointed out that not everyone residing in Fayette County work within the county. He further illustrated that new residents purchasing new homes eventually result in increased revenues due to the corresponding hike in property taxes.
In the coming months, the City Council will integrate all these factors to arrive at the final budget. The promising revenue growth signals a return to normalcy for the city, aligning with the overall economic recovery post the pandemic period.
