Obetz officials warn unpredictable corporate tax refunds and rising police costs could strain 2026 budget

City Administrator E. Rod Davisson told the Obetz City Council on Nov. 17 that the administration is preparing for fiscal pressures as it drafts the 2026 budget, including unpredictable corporate tax refunds and rapidly rising policing costs.

Davisson said the city moved money from the gas fund into the general fund and noted Obetz has repeatedly received the Government Finance Officers Association (GFOA) award for its financial practices. He urged long-term planning, saying the city must look 10 to 20 years ahead to protect Obetz’s future.

Davisson described a policy risk tied to state law changes that began in 2023, which he said allow corporations to obtain larger refunds from municipalities. “Obetz does not have a way to predict the amount of these refunds and when they will occur,” he said, and added the state’s push for centralized tax collections could further reduce local control.

He also listed several city-run operations that currently operate at a loss — concession stands, the Fortress, the Obetz Athletic Club, youth athletics, Zucchinifest and the Community Center — and said the city should set aside funds each year to cover corporate refunds and conversion payouts so routine services are not disrupted.

On public safety, Davisson said the cost of policing is rising “at a staggering rate.” He said there are no layoffs in the current proposal, but staff who retire or resign may not be replaced, and “there could come a time when Obetz does not have its own police force” if costs remain unsustainable.

Councilmember Robert Kramer asked follow-up questions about the mechanics of corporate refunds; Davisson described them as computed on a rolling five-year basis and difficult to predict.

The council will consider and vote on the 2026 permanent appropriations at its December meeting.