EXTRA CONTENT: Corbin cuts spending 25 percent in 2011 budget; city leaders cite loss of tax revenue

Read the complete Corbin City budget for 2011 fiscal year, the budget message and 2010 amended budget by clicking here.

Corbin city leaders passed a leaner, stripped-down budget for the upcoming fiscal year – a spending roadmap that represents a cut in total expenditures of about 25 percent.

During a special called meeting Tuesday morning, Corbin’s Board of Commissioners voted unanimously to accept the somewhat controversial budget proposed by City Manager Bill Ed Cannon. Commissioners are expected to approve a second reading of the budget during a meeting this morning to make it law.

Total General Fund appropriations for the budget are $7,686,467, a sharp decline from actual expenditures of $10,197,227 in the 2009-10 fiscal year.

During his budget address at Tuesday’s meeting, Cannon said he was forced to cut budgeted spending for many departments in city government to account for decreased tax revenues, particularly a loss of about $135,000 in municipal insurance taxes. He also said garbage "tipping fees," charged to the city for dumping garbage at the local landfill, have increased six percent and that the cost of health insurance for employees has risen four percent. Revenue from business license fees, alcohol regulatory fees and the city’s three percent restaurant tax are down.

"There are no proposed pay increases reflected in this year’s budget due to the extreme difficult economic conditions we are experiencing on a local, state and national level, however the existing workforce presently maintained by the City of Corbin in the essential health and public safety arena is expected to remain constant with hopefully no layoffs," Cannon said. "The Commission will continually monitor the economic situation in hopes that conditions will improve."

Actual collection of the municipal insurance tax for the current fiscal year was $1,456,018 as of Tuesday. The city budgeted anticipated collections of $1,465,100 for the upcoming cycle.

Cannon said the situation is actually worse when considering the fact that city leaders had budgeted $1.8 million in revenue from the tax for the current fiscal year, but received about $350,000 less than expected. The tax is one of the single biggest sources of income for the city outside of property taxes and occupational taxes.

The difference forced city leaders to look for ways to cut costs this year instead of waiting for the new budget cycle. As a result, most departments spent less than budgeted with exception of the Police Department, which spent $115,805 more than its budgeted amount of $1,74,195; Parks and Recreation, which spent $301,545 over its budget of $498,455; and the Main Street Program, which spent $191,399 over its budgeted amount of $158,601. Grant funding, expending normally on a reimbursement basis, accounts for some of the cost overruns in each of those departments.

Total cost cutting in the current fiscal year allowed the city to spend $751,573 less than its budgeted amount of $10,948,800.
The budget for the 2011 fiscal year includes planned increases in spending to only one department; the Police Department – which went from $1,744,195 budgeted in 2010 to $1,988,203. All other departments received cuts. Perhaps most severe was the city’s Main Street revitalization program which was reduced to just $29,877 this upcoming fiscal year as opposed to $158,601 budgeted this year. The town’s Main Street Manager, Sharae Myers, has been reduced to a part-time position of only 20 hours per week.

The cuts to the Main Street Program were the subject of a contentious meeting last week where about 40 people from the public came to support Myers and the program, urging city leaders to reconsider cuts. The Commission defended the cuts as necessary to balance the budget. Cannon said the Main Street Program is the least essential city department when compared to emergency services like the Police and Fire Department, or those in place for health and welfare like Public Works or Parks and Recreation.

The budget does include slight increases in payroll expenses for most departments, but Cannon was quick to note that the money was not set aside for raises. Every December, the city has traditionally given employees a bonus, called a one-time "cost of living adjustment," and the money will hopefully, he said, be used for that. It is normally around $200 per employee.

"We haven’t given our employees a raise in two years and times are just hard. It’s hard for them. I’m sure they are upset about it." Cannon said. "This gives us the maximum flexibility we need. If we have the money then we can give that cost of living adjustment. If not, then we can lower it or pass on it altogether to make sure we stay within our budget."

To see complete copies of the 2011 fiscal year budget, and the 2010 amended budget, as well as the complete text of Cannon’s budget address, go to www.thenewsjournal.net.

¥ In other business, the commission voted to accept a proposal from One Beacon Insurance in the amount of $180,481.40 for property and liability coverage, and a bid of $92,001.09 from Kentucky Employers’ Mutual Insurance for worker’s compensation coverage. Cannon said the city saved about $60,000 total from the two policies.