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NB budget steady despite recession

The economic recession has not seriously affected North Bend’s 2009 budget, which was published this week.

The City of North Bend cut one job when it re-organized several positions earlier this year, and its budget this year is tighter because of decreased tax revenue caused by the economic recession.

The city will have to put some projects on hold but it is in better shape than many cities, said North Bend Mayor Ken Hearing.

The recession has hurt many cities, which had greatly increased spending in recent years due to development that has dramatically halted, forcing them to sharply cut their budgets. North Bend has been spared this experience because it banned development after running out of water rights in 1999. The city expects to lift the ban by April.

Overall sales tax collections for North Bend were down slightly for December 2008 compared to the previous year, but this was due to a drop in development-related sales tax. Sales tax from retail and services were up slightly to $145,164 from $143,856. In all, North Bend collected $157,079 in December 2008, compared to $168,393 the year before, a decline of $11,314.

The Factory Stores at North Bend are the single largest source of sales tax, according to Duncan Wilson, the city administrator. Sales did not drop in December despite the worsening economic situation.

Cities receive sales tax collection numbers from the state a month after the month in which they were collected, so cities receive numbers for December in February. The city receives 0.85 percent of the 8.6 percent sales tax collected on retail purchases. Sales tax is also charged for certain services, including purchases at restaurants.

Taxes makes up nearly 75 percent of the city’s general fund.

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