From the very beginning of the current public health crisis, we knew that our families, businesses, and government were going to face a great economic crisis as well. We did not yet know how great. We all know a family breadwinner who is out of work or a favorite local shop that has closed. In the City of Denton, we predict that sales tax revenues (which help fund our police, fire department, streets, etc.) have dropped somewhere between 15 and 25 percent.
But I am proud to say that Denton has met these challenges head on. As the time comes to set our City budget and tax rate for the coming year, I expect that in September we will adopt a balanced budget and an effective tax rate—one designed not to collect more revenue than the year before. As a utility provider, we do not expect any rate increases for water, sewer, or solid waste.
We are able to do this because the City of Denton is an excellent steward of your tax dollars, and because we are weathering the crisis better than many other communities. That is not to say that everything is rosy—many families and businesses are in dire straits. Even so, the outlook in Denton could be much worse.
Before the crisis Denton enjoyed sustained economic growth. New businesses were opening on every corner, and unemployment was very low. Even as the natural gas industry petered out, other sectors were growing. In 2019 the SmartAsset firm named us the number two “boomtown” in the country.
Still, your City Council did not take this as a license to overspend your tax money. Our budget is lean and focused. Your City tax rate is lower than it has been in years. And we have done a good job of what I call “banking our growth.” By that I mean we started important infrastructure projects—streets, fire stations, waterlines, etc.—during times of steady revenue and low bond rates.
Some sectors performed at almost the same level even during the “lock down.” With our large universities and other government agencies, Denton has many salaried employees with about the same amount of money as before to spend at local businesses. Low interest rates mean that people are still buying houses, and new people are still moving here.
And don’t overlook this—the people of Denton LOVE to support local businesses. We know that small business owners need our help in tough times. We would rather spend more to support a friend and neighbor’s family than spend less and support the stock price of a large corporation. Our restaurants and bars—staples of Denton culture—are especially hard hit right now. Many have found creative ways to soldier on, but they can all use your patronage right now.
Moreover, when the crisis hit, the City Manager took immediate steps to safeguard your public funds. He instituted a hiring freeze and got permission from the City Council to begin a voluntary separation program. Eight-seven city employees took advantage of the program. We hate to lose experienced people, but from this early, decisive action we expect to save $9 million in the next budget year and will not lay off any City employees. This also gave us a chance to tighten up some departments, and we will not fill a number of vacant positions as we pivot to meet changes.
We cannot accurately predict what the future will bring. But I can confidently say that your City is as fiscally healthy as we could be, and ready to meet the next challenge as nimbly as we have met this one.