A roughly $659,000 shortfall in projected sales tax revenue is putting added pressure on Cleveland’s proposed 2026-27 budget as city leaders look for ways to maintain services without dipping heavily into reserves.
City Council got its first broad look at the proposed budget Tuesday, Aug. 18, during a lengthy discussion that touched on property taxes, staffing, economic development and the importance of getting more people to shop locally.
The city had projected approximately $6 million in sales tax revenue for the current budget year but is coming in about $659,000 below that estimate, according to figures presented by City Manager Lee Tipton.
The sales tax numbers are particularly important for Cleveland because those dollars help fund the day-to-day services on which residents rely.
Council members discussed the role local spending and new business development could play in strengthening the city’s finances. During that conversation, Tipton agreed that getting more people to shop locally would help the city’s bottom line and said economic development staff is working to bring additional businesses to Cleveland.
Mayor Danny Lee also pointed to the ongoing reconstruction of the Cleveland Walmart as a reason for optimism. He said the work has temporarily affected the city but expects the store to be a boost for Cleveland once the project is completed.
The budget discussion eventually turned to property taxes.
Council voted unanimously to establish a not-to-exceed property tax rate of 75 cents per $100 valuation. Cleveland’s current rate is 63 cents.
The 75-cent figure is not the final tax rate. It just sets the maximum rate council can consider as it continues working through the budget and receives final financial information. Tipton told council members that city staff believes the eventual rate could be lower.
Council set a public hearing on the proposed tax rate for Sept. 15.
The proposed budget remains a work in progress, with city officials still waiting on information needed to complete the tax calculations.
New impact fees approved
Council started the meeting with a public hearing regarding the City’s water and wastewater impact fees. When it was time to vote, Council unanimously approved ordinance adopting the new water and wastewater impact fees for future development.
The fees were set at $1,919 for water and $1,586 for wastewater, for a combined $3,505 per service unit.
The one-time fees are intended to make new development contribute toward the water and wastewater infrastructure needed to accommodate growth.
Council members questioned whether the added expense could discourage developers or businesses from locating in Cleveland. During the discussion, city officials compared Cleveland’s proposed fees with those charged by other communities and said Cleveland would remain competitive.
Bleyl Engineering helped the City develop the impact fees.
Other council business
Council approved annual street closure requests for several upcoming community events. Streets will be closed as needed for the Cleveland ISD Homecoming Parade on Sept. 3, Pedal in the Pines/Log Jam Fest on Nov. 6-7, and the Downtown Cocoa Crawl on Dec. 3.
Council also approved a $3,000 service provider agreement with CASA of Liberty and Chambers Counties. Representatives of the organization discussed CASA’s work providing trained volunteers to advocate for children in the foster care system.
The Cleveland Economic Development Corporation’s proposed 2026-27 budget also came before council for a first reading.
Part of that discussion centered on money budgeted for Cleveland’s gateway and wayfinding signage program, including questions about what has already been spent and what remains to be completed.
Council also unanimously adopted bylaws for the Parks and Recreation Board. During the discussion, city officials clarified that the board serves in an advisory role and cannot financially obligate the city. Projects and recommendations ultimately come before City Council for consideration.
Another unanimous vote approved an updated Airport Layout Plan for Cleveland Municipal Airport from Airport Manager Eric Gallindo.
Officials described the plan as an important step toward securing grants for future airport improvements. The plan lays out possible phases of development but can be changed as the airport’s needs and priorities evolve.
The previous airport layout plan was believed to be about 20 years old.
OMG, they projected 6 million BUT only got 5.3…….OMG, here comes more taxes people,.!,,,