Huntington budget unchanged despite occupation tax approval

BY WHITNEY BURDETTE
The Parthenon

For city employees, the Huntington budget for fiscal year 2011-2012 could mean layoffs and cuts in their departments’ budgets. Despite the recent approval of the 1 percent occupation tax, the city’s budget remains unchanged, meaning the city’s economic future still looks bleak.

Deron Runyon, director of finance for the city, said Council members don’t want to count on money that they have not yet received.

“It has been approved and is expected start July 1, but there is still the issue that this has never happened before and is new to West Virginia,” Runyon said of the controversial tax. “Because of the potential for court action, we did not budget any of those revenues in our budget.”

Runyon said revenues collected from the occupation tax will not fund things such as payroll or employee benefits. Instead, the money will be used for one-time capital projects such as public works or paving.

“It’s not going to be used for more police, more fire, more administrative employees,” Runyon said. “That’s why it was not budgeted."

Although the tax is controversial, members of City Council said the city cannot provide services without the additional revenue.

“If the city has no money, we can’t fix potholes,” said Councilwoman Sandra Clements after February’s State of the City address. “Nobody wants more taxes, but in order to have services, you have to pay taxes.”

The final budget stands at $39.8 million without grants, which is consistent with the past three fiscal year budgets. About $4.6 million of that comes from the city service fee, also known as the user fee. The occupation tax will replace the weekly $3 fee.

Runyon said City Council wanted to increase the paving budget, so Council asked several departments, including police and fire, to decrease their budgets so the paving budget could increase. The police department receives about 27 percent of city revenues while the fire department receives about 26 percent, according to the budget. The street department only receives 4 percent.

“We submitted a $600,000 budget for paving and they wanted something closer to $1 million in paving,” Runyon said. “That was one of the reasons we had to go back and pull money from each department.”

Although each department requests funds based on its needs, City Council has the final say in the budget and can move money, cut budgets and eliminate positions.
The city has cut positions in a few departments because of budget concerns.
“With administration and public works, we reduced six or seven positions,” Runyon said. “Three of those have happened already, and more are expected to happen.”

Runyon did not specify whether those cuts were permanent.

Although the police department has seen a budget cut, it will not have to eliminate any positions, Runyon said. The fire department wanted to fill four vacant positions July 1 but will have to wait until January. Runyon said three retiring firefighters have to take a slightly lesser payout because of budget constraints.

“When they leave, they get some money for vacation and sick time and things like that,” Runyon said.

The typical payout for retirees is around $50,000. Runyon said the finance committee analyzed the specific retirees to determine their individual payouts.
Runyon said the city must also consider the rise and fall of utility prices throughout the fiscal year.

“This year, fuel costs were probably budgeted a little low,” Runyon said. “Utilities have gone up in some areas, so we have to make some adjustments for the current year.”

Runyon said cutting budgets is nothing new. If expenses exceed revenue, the committee looks at department budgets to see where it can make cuts.

“Everyone always asks for a bit more than we can give them, unfortunately,” Runyon said.