KENNEWICK -- Expect the economic forecast to be tougher in the new year, said Kennewick officials, whose midbiennium update to the city council Tuesday could feel like a prediction for a long, cold winter ahead.
Tuesday's council workshop will plow deep into forecasting revenues and expenses for the second half of the 2011-12 biennium. Most revenues are expected to taper off.
The best estimates for revenue projections in 2012 show the city coming up about $653,000 short of the expected $89,577,000 originally budgeted for the general fund.
Sales taxes, which grew by 7.5 percent this year, may show only 2 percent growth in 2012.
The criminal justice sales tax that grew by 15 percent this year is expected to fall dramatically too, to 2 percent growth next year, according to the report prepared by Dan Legard, the city's finance manager.
The electric utility tax probably will slide from a 9 percent growth in 2011 to 7 percent next year, but the telephone utility tax, which was down 4 percent this year, may see a turnaround with 3 percent growth in 2012.
Legard's report forecasts an 11 percent increase in medical insurance costs, despite an earned discount of 2 percent because city employees have taken responsibility to achieve individual wellness goals.
A $1.4 million contribution to the ambulance fund is another big expense for the 2012 general funds, Legard noted.
But Legard's expense calculations show across-the-board savings, which should ease the economic pinch next year.
The report also reveals the long-term forecast toward the 2013-14 biennium will depend on whether the city's sales taxes and other tax revenues can maintain a 3 percent to 4 percent growth.
The city also may have to share in the state's deficit woes, especially if the legislature chooses to take back local shared funds from profits and taxes on liquor sales. Legard's report stated that would ding Kennewick's budget $450,000 in 2012, and about $1.8 million in 2013-14.
As the city prepares for 2012's economic issues, Legard's report notes the council has decisions to make about the ambulance fund, the stormwater utility fund and making adjustments to fees and charges based on the cost for providing building, engineering and planning services.
The council also is expected to take a hard look at capital projects, which amount to about $57 million worth during the next six years, if all of them are pursued.
The meeting is at 6:30 p.m. at Kennewick City Hall, 210 W. Sixth Ave.
* John Trumbo: 509-582-1529; firstname.lastname@example.org