City budget committee hears state shared revenue briefing; approves $90,000 errata for compensation consultant

The Springfield city budget committee held a public hearing on state shared revenues, received an in-depth presentation about the funding sources that feed the general and street funds, and approved a $90,000 errata to cover a compensation and classification consultant contract that exceeded the amount the city had budgeted.

Jessica Mummy, the city's budget and procurement manager, led the state-shared revenue briefing and described four primary state revenue sources that affect Springfield's general fund and street fund: the state's Highway Trust Fund, liquor apportionment, marijuana tax distributions, and cigarette tax changes from recent ballot measures. "Using projections from the state of Oregon, the League of Oregon Cities actually produces estimates on state shared revenues for cities to utilize when they're building their budgets," Mummy said.

Why it matters: State-shared revenues account for a material portion of the city's general fund and street-fund revenues. Changes in those state distributions or in market conditions for taxed goods can materially affect the city's near-term budget picture.

Key points from the presentation

- Highway Trust Fund: Mummy explained that the Highway Trust Fund supports construction, preservation and maintenance of streets and roads, and that the 2017 legislative package (House Bill 2017) increased per-capita funding through fuel-tax and other changes.

- Liquor revenues: Cities receive 34% of statewide liquor revenue distributions; 20% is per-capita and 14% uses a more complex formula involving property taxes, population and income. Mummy noted the state's liquor-distribution warehouse bond payments reduce the annual pool available to cities.

- Marijuana and cigarette taxes: Mummy said marijuana tax revenue to cities has declined from earlier levels after Measure 110 and market oversupply reduced tax receipts; she also summarized the 2020 Measure 108 cigarette-tax increase and related changes, including a new vape tax and higher pack taxes.

Errata and consultant contract

During deliberations staff presented a prepopulated errata item: the city had budgeted $50,000 for a classification and compensation consultant but the selected contract came in at $140,000. As a result, the committee approved an adjustment to increase Human Resources operating expense in the insurance fund by $90,000 and decrease insurance fund reserves by $90,000. The contract will support a full reclassification and compensation study for SEIU and non-represented positions; staff said the consultant will implement the pay-range changes and assist in classification disputes during the three-year period covered by the study.

Budget adoption and levies

After accepting the errata, the committee approved the city budget (including the accepted adjustments). The committee also approved a set of levy motions; the exact motion language recorded in the meeting included:

- A motion to direct counsel to levy a property tax for fiscal year 2025-26 at a rate stated in the meeting motion (motion text as read at the meeting).

- A motion to levy a special operating local option tax for fire at 38 cents per $1,000.

- A motion to levy a special operating local option tax for police and courts at $1.40 per $1,000.

- A motion to levy an additional $6,075,000 for the retirement of the city's bonded indebtedness.

Each motion was seconded and carried during the session.

Context and next steps

Mummy and members noted that state revenue projections can change as the Legislature and statewide economic conditions evolve, and that the League of Oregon Cities updates its estimates throughout the year. Staff said they would continue to monitor state forecasts and adjust projections if needed.

Ending

With the budget approved and errata accepted, the committee adjourned. Staff said vacancies on the budget committee will be advertised and thanked members for their service on the budget review process.