FY2021 Budget

The vehicle decal tax of $30 per vehicle was approved in FY 2019 and is the maximum levy authorized. Of the $30, $5 may be used for any lawful purpose, and $5 may be used to fund public transportation system costs. The remaining $20 must be used to maintain, repair, construct, reconstruct, widen, or improve public streets in the municipality that are not part of the State highway system. The town’s budget fulfills these requirements. Prior to COVID-19, Sales Tax revenues showed strong growth trends ahead of FY 2020 projections which may provide some cushion from the now anticipated loss of sales tax revenues beginning in March as businesses closed due to stay at home orders. Forecasts of sales tax revenues for the remainder of FY 2020 have been adjusted down by 10% or to $5,400,000 as compared to original budget expectations of $6,080,000. Sales tax revenues are 14% of the General Fund revenues and the second largest revenue source for the Town. Developing projections for the upcoming fiscal year has been challenging during these uncertain times. Because of the timing of reporting and receipt of sales tax revenues, the true loss of revenues for March and the remaining months in FY 2020 will not be known until around late May or June, when the March 2020 report will be available. This source is sensitive to consumer confidence and volatile shifts in economic climate. Budget forecasts are the best available under the circumstances. Projection assumptions for FY 2021 Sales Tax applies a flattening or no growth strategy. Sales Tax revenues for FY2021 are projected at $5,400,000. This results in an overall loss of 16% from the amount the source would have estimated at for FY2021 prior to the pandemic. Sales and Use Tax • Utility Sales Tax is projected to generate $1,640,000, which is 2.5% growth over estimated FY 2020 revenues and is 4.4% of total General Fund Revenues. Utility Sales assumptions are relatively static with a minor growth factor. Underlying factors such as weather, energy prices, population expansion and technology changes primarily contribute to shifts in utility consumption. • The Wake County Fire Tax projected revenues of $806,000 represents the Town of Morrisville’s cost share allocation fromWake County for fire protection and mutual aid. This allocation has been reduced by approximately 6% from the FY 2020 allocation of $854,500 and was expected due to the expiration of the hold harmless commitment from fire service district alignment. The Morrisville Fire Chief and staff remain actively engaged in advocating for MFRD service area to protect fire tax revenues. Future fire station location discussions are a critical part of this revenue distribution allocation. Other Major Revenues Other major revenue sources for the Town include the Utility Franchise Tax, the Wake County Fire Tax and Video Programming Fees:

• Video Programming revenues of $656,000 reflect no growth over estimated FY 2020 projections and is approximately 2% of total revenues. This resource reflects the change in consumer market from cable TV to streaming services.

29