JOHNSON CITY, TN (WJHL) – For the first time in several years the City of Johnson City actually had more money at the end of the year than leaders budgeted and the city manager hopes that means the economy is headed in the right direction.
According to Pete Peterson, an unexpected increase in tax collections and decrease in government spending led to a $2.5 million surplus for the fiscal year that just ended a few months ago.
Peterson says leaders plan on putting $1 million of that in the city’s fund balance (basically a savings account), using $750,000 to buy a new fire truck and public works equipment and the putting the remaining $700,000 in the city’s capital project’s fund for projects to be determined at a later date.
“I think this is a good indicator that the economy, at least last year, is coming back to where it was pre the Great Recession and that economic activity in the Tri-Cities and Johnson City in particular is on the incline,” Peterson said. “Hopefully things are looking up. It’s also a reflection of the fact that the commission has invested wisely in infrastructure and projects to make sure Johnson City is a much more attractive place to live, work, play and do your shopping.”
According to Peterson, the surplus will help the city avoid having to borrow more money for some of its projects and avoid paying more interest in the process. In addition, he says having more money in the city’s fund balance will help the city save up so that leaders can avoid tax increases the next time the economy declines.
“It’s going to save us on making interest payments on some of the debt we’d normally issue and it also allows us to put money away in the bank for another rainy day,” Peterson said. “History is a great predictor of the future and there will be another rainy day coming and if we can put money away into our fund balance then it will prevent us from doing another tax increase during a period of down economic activity.”
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