Belmont budget shows surplus

Belmont’s 2023 overall budget shows a surplus, although financial pandemic recovery and dips in tax revenue remain long-term concerns. Belmont’s operating budget is $55.9 million. The city has a general fund revenue of around $31 million, with expenditures of about $28.3 million, resulting in a $2.7 million surplus.

Federal funding from the American Rescue plan Act added $3.2 million to revenue, ensuring there is a surplus this year. For expenditures, Belmont Fire Protection District will get $12.3 million this year, with $19.3 million set aside for capital improvement projects funding.

Councilmember Charles Stone noted while the city had a surplus and strong reserve now, the city could face uncertain times in the future. He said while the city could not address all its wants for a growing area, like more personnel and capital improvement projects, he was cautiously optimistic.

“It’s a huge undertaking, and it speaks very clearly to our priorities, which continue to be keeping this city safe and high quality of life. We frankly don’t have the revenue that we wish we did,” Stone said.

The city’s general fund projections show falling revenues over the next 10 years that will require using reserves to balance the budget. Belmont has spent the last year looking at expanding its revenue sources base to help future budgets. The city is exploring a more equitable structure for taxes to the small business community through an updated business license tax that will also raise revenue. The city is also examining increasing its transient occupancy tax from 12% to 14%. The increase would bring an additional $700,000 annually to the city’s general fund.

“We are somewhere between surviving and thriving, and we need to move closer to thriving,” Stone said.

One of the most significant financing issues moving forward is underfunded tax revenue from the state. City staff has raised concern California is currently underfunding property tax in lieu of vehicle license fees. A recent state budget estimate is using Educational Revenue Augmentation Funding to backfill the vehicle license fee shortfall. ERAF is excess local property taxes returned by the state after local school districts are fully funded to mandated funding levels.

A staff report said the ERAF funds are already owed to cities like Belmont and are instead being used to pay a separate state obligation. The council declared it a long-term issue and is looking to regain local control over local revenue sources.

Residents have declared street repairs, emergency responses, crime prevention, parks and public works key priorities in the 2023 budget. The city has prioritized hiring more city workers, developing diversity and equity programs, street improvement funding and public safety funding. Hurt wants to look at a climate or carbon budget in the 2024 cycle, looking at what it takes to reduce greenhouse gas emissions in buildings and other areas.

curtis@smdailyjournal.com

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