For many, one of the most troublesome aspects of the fiscal cliff is the chance of tax increases, and if nothing is done, you the average citizen, are guaranteed higher taxes in the new year. That could spell out trouble for local governments' budgets. If the country does take a dive from the fiscal cliff with no plan of action from federal leaders Shreveport could fall quite hard. A tax increase back to Clinton era levels for the general population could mean less spending that's bad news for the city. A large chuck of the city's revenue is sales tax based. City Councilmen Oliver Jenkins says the budget could take a hit.
"I don't think we're going to see a 30 percent decrease in revenue, but we could see a 10 percent and that would a effect our budget and our process and we would have to adjust," Jenkins said.
However, sale tax revenue is already down in the city's budget for the new year. Jenkins says operation reserves, which would aide in reveue loss, are down to $4 million. He says right now, the city hasn't taken any action to prepare for the fiscal cliff but must wait."
"We have to wait and see," Jenkins said. "If and when that effects us. there's a chance we'll have to adjust our budget accordingly."
Caddo Parish Administrator Woody Wilson says the parish finances wouldn't take too much of a blow but there's still cause for worry.
"We are concerned about the rippling effect it has on the national economy because we can't escape that," Wilson.
He says the only federal money the parish receives is filtered through the state. Some of that cash funds juvenile justice programs, which might be subjected to cuts due to an economic downturn.
"We have almost a million dollars a year in various programs through the department of juvenile justice through the state," Wilson said.
Wilson says a lack of consumer interest in buying property could hurt parish property tax revenue.
"The largest homes are in the parish and they would delay those decisions, because if you buy those homes in the parish we get the taxes from that," Wilson said. "So, it does effect us indirectly and also directly."
In earlier reports, we told there were about $15 million in the city revenue reserve at the beginning of 2012.