CHEYENNE, Wyo. — Although Mayor Patrick Collins doesn’t regret many spending decisions made for Fiscal Year 2022, he acknowledged the city “had work to do to balance” its proposed FY 2023 budget as expenses increased.
Collins shared that message in a public budget workshop today as he and City of Cheyenne Treasurer Robin Lockman met publicly to review the proposed $59.6 million city budget for FY 2023. The proposed general fund budget, totaling $59,636,705, is up more than $5.7 million over the current fiscal year budget.
The city is hosting several work sessions to review the budget. The meetings will take place May 4–13 from noon to 1 p.m. in the Municipal Building Council Chambers, located at 2101 O’Neil Ave. The meetings will be livestreamed on the city’s social media pages, through a Zoom link available at www.cheyennecity.org/ecm, and televised on Spectrum channel 192.
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In today’s meeting, Collins gave a brief overview of the budget.
“Last year, we talked about the fact that [within] our budget … our ongoing expenses should be paid for with reoccurring revenues. And for the most part, that’s exactly what we’ve done. Our ongoing expenses are paid for with reoccurring revenues,” he said.
Inflation and City Council spending decisions have increased the city’s expenses by $2 million from the current fiscal year, the mayor added.
“It was a sobering moment when Robin informed me that we had work to do to balance,” Collins said, “but I don’t regret most of the decisions we made during the past year.”
Lockman went deeper into the budget. She said the city is in a better financial situation than before, but financial issues may loom.
“I’m very concerned with the surging inflation levels,” Lockman said. “According to the state’s data released on April 22, the filings year over year fourth quarter 2021 inflation rate is now in the double digits at 10.2%. This is the highest level we have experienced in over 40 years.”
Lockman said she is closely following many indicators for an impending recession, the first of which is a yield curve.
“Yield is simply the interest rate earned on bonds and the yield curve,” she said.
The curve, which is spread between the two- and the 10-year yields, was inverted as of April 1.
“Inversion means, in layman’s terms, interest rates on short-term investments are higher than those of long term investments. … A yield curve inversion historically is a sign that investors are expecting a slowing economy; when the yield curve inverts, a recession historically takes place an average of 12 to 24 months later,” she said.
The second indicator that Lockman has been looking at is the gross domestic product, or GDP.
“The GDP is a total monetary value of all goods and services produced during a specific time period,” Lockman said. “On April 28, we learned that the U.S. economy unexpectedly shrank 1.4% annually in the first quarter of 2022. This is the first negative quarter for the U.S. economy since the start of the pandemic in 2020.”
With a possible recession on the horizon, Lockman said she and the mayor were cautious when determining sales tax revenue projections. About the sales tax revenue, “There have been some upsides for local governments amid all the recent economic shifts,” she said.
This upside is that, because inflation raises prices, it has led to the sales tax revenue also being raised. Lockman said inflation has also led to a significant increase in the city’s fifth and sixth penny revenues over the past 15 months; as consumers pay more for goods, they’re paying more in sales taxes.
“Along with the bad news of inflation, the good news is sales tax has inflation elasticity, meaning sales tax receipts will generally increase resource depletion. As a result, we are seeing our revenues keep pace with our current expenditures thus far,” Lockman said.