City expects growth in income tax again next year

Springfield projects to add $2.2 million to general fund in 2023.

Springfield officials are expecting to see income tax revenue increase next year to a number around $45.2 million.

The city is slated to generate $43 million in income tax revenue for this year.

Income tax makes up over 80% of Springfield’s general fund, which is estimated to be around $55 million for 2023, according to a recent presentation that highlighted the city’s tax budget for next year.

The portion of income tax that makes up general fund revenue has continued to increase, going from 75.24% of general fund revenues in 2014 to an expected 81.37% of that revenue in 2023.

Income tax collections have been increasing over the years. The only exception was during 2020 as annual income tax revenues fell from $36.4 million in 2019 to $35.6 million in 2020 due to the economic impact of the coronavirus pandemic.

However, income tax revenues rebounded to 39.9 million in 2021.

That information was shared to with city commissioners recently by Mark Beckdahl, Springfield’s finance director. An ordinance to adopt the tax budget was also approved by elected officials during their bi-weekly public meeting on Tuesday.

Projected tax revenue is part of larger discussions related to what the city’s overall budget will look like in 2023. City officials will be examining expected expenses in the near future and the overall budget for 2023 is expected to be presented by the end of this year.

“It is awfully early in the year to be focused on expanses. We will be talking about those throughout the summer,” Beckdahl said during his presentation to city commissioners.

In addition, to income tax revenue projections, Springfield also expects an additional $3.8 million in general fund revenues to come from fines, licenses and charges for services administered by the city.

Local government funds are expected to add $2.4 million in general fund revenues, representing an increase when compared to what is expected this year, Beckdahl said.

Springfield is expecting total revenue related to major operating and capital funds to total about $104.3 million for 2023.

Projected general fund revenue will make up 53% of that. Other revenues outside of the general fund, include $31.4 million from the city’s utility funds, $7.8 million from permanent improvement funds, $4.2 million from the city’s street funds and $3.5 million from the special police levy.