TOPEKA (KSNT) - During the regular City Council meeting on July 9, City Manager Dr. Robert Perez mentioned a $15 million deficit going into 2025. 27 News reached out to the city for clarification.
City spokeswoman Taylor Bugg told 27 News the $15 million deficit is projected for the city's general fund. Bugg said the deficit is a result of flat sales tax collections, property taxes appreciating slower than in the past and a 5% decrease in franchise fees in 2024 compared to 2023.
Bugg mentioned other increasing expenses such as higher labor costs, higher third-party contract costs and increased commodity costs as increasing the city's 'expense environment'.
On Tuesday, July 9 the council voted unanimously to increase the maximum property tax rate from 35.341 mills to 38.952 mills. Perez reiterated the increase is to the maximum mill levy rate, not the actual mill levy.
"Now we're not expecting the mill [levy] increase to fully fund that deficit," Perez said. " We will be looking at other revenue sources."
Bugg said the first four months of sales tax revenue is flat compared to the first four months in 2023. Last year, the city saw a 7.11% increase in sales tax revenue from 2022. This year the city has only seen a 0.65% increase over 2023.
"The City of Topeka wants to reiterate that this is an initial projection without making any cuts, service reductions, or using other funds or funding sources to subsidize the general fund deficit," Bugg said in the response to 27 News.
Property tax revenue has also seen slower appreciation. Last year the property tax revenue appreciated 8.78% over 2022. In 2024, property tax revenue has only appreciated by 4.59% so far.
Bugg said staff is working with the City Manager to evaluate opportunities and options to present a balanced budget to the City Council for evaluation and discussion on July 30.
"Part of the city's evaluation will involve consideration of all funding sources, such as the unassigned reserve fund, to address the FY 2025 projected deficit and ensure a sustainable budget in FY 2026 and beyond," Bugg said. "We will have a better picture of the budget over the coming months as we continue to work through this process."
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