By JAN McLAUGHLIN
BG Independent News
Halfway through 2025, the City of Bowling Green is seeing some troubling signs for next year’s budget.
Historically, the city has seen its income tax revenue tick upward each year. But this summer, city departments are being cautioned that due to drops in the income tax revenue, they are likely to see some funding cuts ahead in 2026.
Bowling Green Finance Director Dana Pinkert presented her second quarter report Monday evening to City Council. It’s rare for her to have negative news to report, so much of the focus Monday was on the unexpected dip in income tax revenue.
Normally by the end of June, the city has collected 53% of its projected income tax funds. But this year, the shortage is $415,143 lower than the city’s estimate, with the actual drop being $228,916, Pinkert said.
“I’m confident we can absorb that,” this year, she said. But Pinkert warned that the loss will affect next year’s budget.
City departments have been asked to be more diligent managing expenses – and to start looking at ways to reduce operating costs, Pinkert said.
“To put us on better footing,” for next year, she added.
The source of the revenue decrease appears to be business income taxes – not that less is owed, but that several businesses submitted higher estimates last year. They paid the higher taxes last year, and therefore can pay less this year, she explained.
“We’re expecting it next year to fall back in line,” Pinkert said.
But until then, city government will have to be even more conservative than usual, she said.
“We are going to have to tighten our belts,” Pinkert said.
City Council President Mark Hollenbaugh called the news “concerning.”
Pinkert agreed, but put it in perspective – with the dip relatively small compared to the annual income tax revenue estimate near $28 million.
“While it’s concerning, it’s not a great amount,” she said.
“We have healthy fund balances, and will see where we can reduce,” she added.
Pinkert also pointed to the income tax levy on Monday’s agenda as a positive.
“I do think that tonight’s legislation is a step toward creating sustainable planning,” she said.
Pinkert said she will be keeping a close eye on the revenues each month, and will report back to City Council in another three months.
