Sales tax expectations down in Chelsea budget

The Chelsea City Council unanimously passed the budget for fiscal year 2009 at a special meeting Monday night.

While the expected revenue is higher than ever before at $6.79 million, city officials do acknowledge the current economic crunch by projecting sales tax revenue of $3.3 million, down from last year’s budget projection of $3.9 million.

However, Chelsea ended up grossing $3.2 million in sales tax last year, which was significantly below the $3.9 million expectation.

The city jumped that hurdle by cutting spending, said Chelsea Mayor Earl Niven.

“We didn’t spend some of the money that we had set aside in capital expenditures,” he said. “We delayed our fire station some. We just started watching what we were spending.”

Niven said if there are any major economic problems in the coming year, certain capital projects could be put off. He expects the city to see the new fire department built and land for the new ballpark bought right on schedule, however.

“The economy in Chelsea in the last four years has been excellent and increasing every year,” he said.

He noted that sales tax revenue is just one part of the whole budgetary picture.

“Our overall total revenue is going to determine when these major capital projects start,” he said. “I look for this year to be a year where our economic growth is going to continue but our overall revenue is going to level out.”

Chelsea’s police and fire department budget, at $1.87 million, takes up 28 percent of the overall budget. That money goes to the operations of the fire department as well as the salaries of eight firemen and the four deputies Chelsea uses from the Shelby County Sheriff’s Office.

“(Public safety) is our major expense,” Niven said.

The city’s parks and beautification budget went up significantly from $76,700 last year to $111,500 for the coming year. Niven said the city may merge with the Chelsea Youth Club and if that happens, the city will be responsible for maintaining the youth sports fields.

“What we are trying to do is meet all the needs our city has,” Niven said.