Hoover budget to drop for first time

Published 5:29 pm Thursday, January 22, 2009

The Hoover city budget is likely to drop by $10 million, from $96 million for last year to a projected $86 million budget this year, said Mayor Tony Petelos.

The predicted cut is due to a major drop-off in sales tax, he said.

“We’re going to wait and see what the Christmas sales look like, because that’s a huge indicator, and then we’re going to get to work on formulating our budget,” Petelos said. “Sixty-five percent of our revenue is sales tax. We’re highly dependent on sales tax.”

He said the budget would be approved sometime in late February or mid-March. The $10 million cut would be the first budget yearly drop in Hoover’s history.

“We’ll probably see cuts everywhere, including the mayor’s office,” Petelos said. “I think we can tighten our belts and look at expenses. Our staff did a great job tightening our belts last year, and I think we can do that this year.”

No staff cuts are expected.

Despite the cut, Hoover is still strong financially, Petelos said.

“We have a strong reserve. Hoover’s school system has a strong reserve,” he said. “I don’t think we expect to see any major changes in the way services are provided.”

Petelos said the city plans to promote tourism, because unlike sales tax, hotel occupancy tax has not dropped. The city has added several hotels recently, which are helping to generate revenue.

Hotel guests also generate sales tax revenue through shopping and going to restaurants, Petelos said.

The mayor said projects on the Shelby County side of Hoover, such as the Inverness greenway, should not be affected.