Joplin’s budget plan flashes warning signs beyond 2027

Joplin’s proposed $170.8 million budget puts more money toward street repairs and public safety, but city projections show financial trouble could emerge as early as 2028.

Finance Director Leslie Haase presented the fiscal 2027 proposal Monday. No residents spoke for or against the spending plan.

“We’re really like about 25 different businesses all put together, but they have to be accounted for separately,” Haase said of the city’s finances.

It includes $51.4 million in capital spending, down 21% as federal pandemic relief projects wind down.

The city plans to spend $4 million on street overlays after postponing some resurfacing during other construction projects.

“With everything that’s been going on in the community, we’ve been delaying some overlay,” Haase said. “But we plan to do a lot of overlay next year.”

Nearly $14.7 million is budgeted for wastewater treatment and sewer improvements. The plan also continues voter-approved parks, stormwater and capital improvement projects.

Sales tax revenue is projected to grow 2%, while use tax collections are expected to rise 3%.

“Sales and use tax really is what drives our budget, in addition to grants and charges for services,” Haase said.

The proposal does not yet include a full year of revenue from the newly approved police and fire sales tax. Adding that money would increase the budget by about $8.6 million and bring projected sales tax revenue to nearly $58.7 million.

Eligible city employees would receive anniversary step increases and a 2% inflation adjustment beginning Nov. 1, costing nearly $1.3 million combined.

The city expects to end 2027 with about $15.3 million in its general fund.

However, the city’s five-year forecast shows the general fund potentially falling into negative territory in 2028 and 2029, depending largely on future capital spending.

Haase stressed that the model does not include use-tax revenue and depends on future capital spending.

“This tells me that the city — we are spending our operating dollars to provide services to the public, which is important,” Haase said.

General fund grant revenue is expected to fall nearly 22%. Interest income is also projected to decline as the city spends down cash accumulated through grant programs and receives lower returns.

Franchise tax revenue remains another concern as customers move away from traditional landline telephone and cable services. City officials said changes in state law have also limited the city’s ability to collect franchise taxes from newer telecommunications services.

Council members will review the proposal during budget work sessions Sept. 22 and 23.

Final adoption is scheduled for Oct. 19.