DATE TO KNOW Oct. 1
to come to light before the full extent of the virus is known, both McCarter and Hampton said. “Regardless, we have to send a bud- get to council in August and adopt by the end of the year,” McCarter said. Pearland has a strong fund balance, or amount of money without an allo- cated use, which will help the city deal with the e ff ects of the virus as they become clear, McCarter said. The city also has the option to reallocate funds from this year’s budget into the fund balance with coun- cil’s approval, an option that could be proposed to council conservative and focus on core ser- vices through the virus and afterward. “We’ll see what happens in the future and be as fl exible as we can,” McCarter said. Property taxes make up around 30% of the budget every year. Pearland lies within Brazoria, Harris and Fort Bend counties, whose values this summer, McCarter said. The city’s plan is to be
are all expected to be higher this year than last. Friendswood is in the preliminary stages of formal budget planning but is looking at what it would take to o ff er its standard level of services next year, Hampton said. Hampton said she hopes to know more by Sep- tember, when Friendswood would be nearing the end of budget season. “Naturally, there are concerns. But we’re not overly concerned at this point,” she said. Sales tax lags Sales tax
The date Pearland and Friendswood have to begin a new budget cycle, even if the full e ff ect of the coronavirus is not known. SOURCES: CITIES OF FRIENDSWOOD, PEARLAND / COMMUNITY IMPACT NEWSPAPER
“ T h e immediate impact on this is on sales
tax obviously. We don’t see the typical heavy retail we normally see. As this continues, you will see less money in the economy,” McCarter said. Friendswood’s budget does not rely heavily on sales tax, Hampton said. “Sales tax is volatile because eco- nomic downturn a ff ects that dramat- ically,” she said. “We are more of a bedroom community.” A portion of Pearland’s sales tax makes up the majority of the Pearland Economic Development Corp. bud- get, which PEDC President Matt Buchanan expects will be a ff ected. Although Gov. Greg Abbott allowed some businesses to reopen May 1, business will likely not improve over- night, as customer comfort level is half of the equation, Buchanan said. “Obviously being open is going to be of bene fi t to businesses, but next is going to be regaining customers,” Buchanan said. “That’s the key we’ll
know here in the next three to four weeks is that acceptance level.” As the PEDC’s budget goes primar- ily to major projects, it can scale its projects back, Buchanan said. “Our sales tax has fl uctuated a lot over the last 15 years. Obviously, a lot of it has been positive, but it’s not like we aren’t used to fl uctuations,” he said. As Pearland’s growth over the past decade has brought in more sales tax, it makes the e ff ects of the virus on the city nebulous. “One thing I think all of us are dealing with is that we are in a really unprecedented time,” McCarter said. “Even looking at the Great Recession in 2009, we were a very di ff erent city then.”
“WE ARE FORTUNATE THAT PROPERTY TAXES ARE OURMAIN REVENUE SOURCES, MORE THAN SALES TAX. SALES TAX IS VOLATILE BECAUSE ECONOMIC DOWNTURN AFFECTS THAT DRAMATICALLY.” KATINA HAMPTON, FRIENDSWOOD DIRECTOR OF ADMINISTRATIVE SERVICES
a l l o c a t i o n numbers for March show P e a r l a n d received $2.8 million, a nearly 4% decrease from $2.9 million in March 2019.
Friendswood received $865,940, a nearly 10% increase from $788,030 in March 2019. Numbers for April will not be available until June as there is a two-month lag between when sales tax is collected from businesses and distributed to cities.
For more information, visit communityimpact.com .
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PEARLAND - FRIENDSWOOD EDITION • MAY 2020
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