City of Columbia Finance Director Matthew Lue presented a plan Monday that would shift additional tax revenue into the city’s general fund.
Lue said funds that are typically set aside for public improvement will instead be used to bolster the general fund to keep the city’s fiscal year 2026 budget balanced.
He outlined his plan to Columbia City Council members during a budget work session that lasted almost two hours.
Lue cited salaries as a major and eventually unsustainable cost within the general fund.
“The way that we are growing with our employees and the goal of being a top employer ... it doesn’t look good with the way we are going right now,’’ he told the council. “Those expenses are increasing faster than the revenue is increasing.”
Monday’s presentation showed that 70% of the general fund goes toward personnel services, such as salaries, paid leave and other benefits.
Sales tax revenue is the largest portion of the city’s income and is projected to bring in $32.6 million in fiscal year 2026. That represents about a 1% increase from the current fiscal year.
“Unlike last time, we are basically not in the panic mode that we are having a significant decrease in sales tax revenue,” said Deepayan Debnath, a staff economist.
An increase in use tax has helped offset some of the concerns about sales tax revenue, said Assistant Finance Director James McDonald.
The suggestion to move funds previously used for public improvement was met with some questions from the council.
Lue said those funds have been used “to pay for some aging buildings, things like that in the city” but are not legally required to be used in those ways.
Council members Valerie Carroll and Don Waterman asked for further information regarding the past uses of the funds. That information is expected to be presented at another budget workshop on Saturday.
The reallocation of the public improvement funds, if approved by the council later this year, will be reconsidered annually.
Three other taxes are showing a decline in income for the city. Tax revenue on cigarettes, telecommunications and cable TV have been steadily decreasing as consumer trends shift, according to an information slide shown to the council.
Two more budget workshops will be held this week on Wednesday and Saturday, focusing on the other funds the city oversees.
The finalized fiscal year 2026 budget is expected to be presented in August, and there will be three opportunities for formal public comment at regular council meetings before a final vote on the budget in mid-September.
