“Expenditures are outpacing our revenue growth. .... This structural imbalance required a solve,” said Dayton City Manager Shelley Dickstein.
2025 general fund
The city is forecasting that general fund revenues will grow by about 4.1% in 2025 (up $8.9 million). The city’s general fund is expected to take in about $227.5 million next year.
There are two months left in 2024, but revenues for this year are on track to increase by about 3.9% (up $8.3 million from 2023). Revenues saw a small uptick last year (+0.3%, or $670,000).
Income tax dollars account for nearly three-fourths of the city of Dayton’s general fund revenues, and those collections are projected to increase by about 2% in 2025.
Other revenue sources, like property taxes, EMS fees and waste collection fees, are forecasted to see even higher growth.
Although general fund revenues are projected to increase, expenses are predicted to increase even more, to $228.7 million, said Abbie Patel-Jones, Dayton’s director of management and budget.
She said the city’s revenue projection anticipates continued economic growth, though at a slower pace, especially given that income tax revenues are sensitive to economic conditions.
Patel-Jones said the city is balancing its budget with $10.8 million in one-time solutions. This includes using $1.2 million of the city’s cash reserves and $3.3 million of interest from its investment earnings.
The city plans to transfer $3.8 million from its traffic photo enforcement fund, and other savings will come from job vacancies ($700,000) and a health insurance holiday ($1.5 million savings).
Cash reserve, COVID aid
If the city dips into its cash reserves, it would be the first time that’s happened in a long time.
The city predicted it would need some of its savings to balance its general fund budgets in 2021, 2020, 2019, 2018 and 2017. But that never happened because of better-than-anticipated revenues.
Dayton also expected to use about a quarter of its $138 million in federal COVID relief aid for revenue replacement in recent years (2022-2024). But ultimately that proved unnecessary and instead the city put those dollars toward one-time capital investments.
However, Patel-Jones said the city’s general fund continues to face a “structural imbalance” in 2025 and beyond.
She said there are multiple budget vulnerabilities that could come into play, including potential income tax revenue reductions from people working from home and aging infrastructure and facilities.
She said other potential factors include employee shortages in a competitive hiring market and the possibility of a future economic recession.
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