Grand Island reviews revenue outlook as equalization fund, lodging tax and sales-tax projects loom

Grand Island City Council members heard a detailed revenue review from finance staff that highlighted steady collections, several near‑term decision points and a potential funding loss if a proposed state change to the municipal equalization fund advances.

Jamie Parr, a city staff member, opened the discussion by noting the city’s obligation tied to the state fair: “the funds that the host city matches to bring the state fair to the community are by constitution. And, it's not new funds,” she said, and offered to answer follow‑up questions about how the fair has invested in Fauner Park over time.

The presentation, led in large part by Pat (finance staff) and Brian Schultz (finance department staff), laid out the city’s major revenue streams: property tax (budgeted at roughly $12,000,000 for the year), sales tax, casino tax, motor vehicle and franchise fees, and several occupation/occupancy taxes. Pat showed dashboards from the city’s Transparency Center displaying mill levy history and revenue trends and said the administration intends to take a conservative view into the upcoming budget season. “We anticipate ending cash at 45,000,000. Cash reserves are 25%…excess reserves of 32,000,000,” Pat said while explaining that the projection assumes modest revenue growth and restrained expense increases.

Council discussion focused on three near‑term concerns. First, a state bill introduced by Senator Klaus to change or eliminate municipal equalization funding could remove about $1.6 million from Grand Island’s receipts if enacted as written; staff described conversations with the League of Nebraska Municipalities and said the city submitted a fiscal note on the impact. Second, the 2018 half‑cent sales tax that funds roads and public safety projects sunsets in March 2029; staff warned that some multi‑year capital projects (for example Broadwell Overpass) will extend past that date and advised planning now for the sunset year. Third, the lodging (hotel) tax — a local 2% occupation tax — is due for a council decision because it can lapse; staff said that without council action the city would stop receiving about $140,000 a year in city lodging tax dollars for the Heartland Event Center and that the tax can be re‑scoped to support tourism or facility operations broadly.

Brian Schultz outlined how food‑and‑beverage (voter‑approved) revenue is currently allocated: roughly 10% toward the state fair lottery match, approximately $500,000 annually to Grow Grand Island (through multiple agreements), $200,000 to Husker Harvest Days (part of a prior multi‑year commitment), and remaining funds to parks and recreation capital projects. He reminded the council that two major commitments (the Grow Grand Island agreement and a debt service note tied to the Vets Ball Field Complex) will end in 2027, freeing up roughly $3,000,000 in future capacity and prompting a policy discussion about priorities.

On casino and keno receipts, staff explained the distribution formulas in place and how the city currently uses its casino share for property‑tax relief and the keno proceeds largely for parks. Staff noted the city budgeted $1,200,000 for the casino tax in the current year and that keno proceeds typically range from about $350,000 to $400,000 annually.

Council members and staff also discussed operational improvements to tax collection and permitting. Several council members asked about moving more occupation and lodging tax payments to an online platform; staff said online permitting and payment software is on the implementation roadmap and that the finance department is evaluating options to consolidate multiple tax collection processes into a single platform. Staff noted the city has started walking the Good Life District to verify collections and reported $2,400,000 collected to date (staff said the number fluctuates as they finalize receipts).

Looking ahead, staff recommended bringing formal recommendations to council before the FY‑26 budget cycle so the council can decide whether to continue or re‑scope the lodging tax and how to allocate funds freed when multi‑year agreements end in 2027. Staff also said Honeywell will present an energy‑savings, performance‑contract proposal in April that could fund capital repairs at the Heartland Event Center and other city buildings in a way that reduces ongoing operating costs.

The review produced no formal votes during the presentation; council members asked for additional figures and for staff to return with proposals and options in the next round of budget study sessions.