July 15, 2021
Budget Philosophy
By: Pocatello City Council Member Rick Cheatum
The July 8th Pocatello City Council meeting proved once again the huge gap in philosophy on the Council. Both sides on the budget issue agreed the 2022 budget can be easily balanced by tightly controlling capital outlay and using excess reserve funds accumulated over several years. The disagreements are over the need expressed by Stevens, Ortega, and Bray to begin balancing the 2023, and future, budgets by cutting staff now. As I look at this idea, it seems very premature.
I will agree the probability of experiencing a tight budget again next year is very high. The city is expecting a dramatic increase in health care costs and, based on the fire and police union multi-year agreements, which are not final yet, salary costs are also increasing. What is not being considered is the potential city valuation and revenue increase from the many subdivision and housing projects that are underway throughout the city.
Pocatello doesn’t receive property tax revenue from those improvements until they are completed and obtain occupancy permits, but with a year and a half until 2023, I expect a number of them will have occupancy permits by then. The Northgate TIF district development has been delayed by the effects of COVID-19, but nearly all the property has been sold or is under option and apartments, townhouses, and single-family homes are under construction. Commercial construction projects are in the process of design and approval. Even without Northgate, there are infill projects throughout the city and housing projects at the east, west and southeast edges of the city. Everywhere you look, contractors are frantically working to build houses. From October 1-June 30, the 2021 fiscal year to date, the building department has issued over 91-million dollars in construction permits. Some of the permits in that total are not new construction, but include remodels, repairs, and additions to existing buildings and some are permits for non-taxed entities. The new construction will all not complete in time to receive occupancy permits by December 31, 2022 so they can be on the 2022 tax rolls, but many will, and many that were started before this will also complete. Let’s not cry the sky is falling just yet.
