Midyear budget report shows Naperville economy still humming

Naperville's economy keeps humming along.

Despite some sectors indicating a slowdown, the midyear budget report from city officials showed other areas exceeding expectations. Combined, Naperville officials said at last week's city council meeting that the local economic outlook continues to be strong.

"Generally good conditions in the local economy are generating revenues that continue to support services at a very high level," said Ray Munch, the city's deputy finance director. "That said, we've seen some weakness in very specific revenues. But those are balanced out by other overperforming areas."

Revenue for the city's three main budget categories - maintenance and operating, capital and debt service, and special funds - were far ahead of expenses at the midpoint of the year. Revenue stood at $236.1 million through the second quarter, 5.3% lower than projections, compared to $207.6 in expenses, which was 17.5% below expectations.

Consumer-driven revenues continued to surge in Naperville. Sales tax revenue was up 4.4% compared to the same point in 2022, reaching $22.6 million. Bolstered by the return of the state gas tax, the motor fuel tax was up 17.6% to $3.4 million.

Revenue from the home-rule sales tax, food and beverage tax, and hotel-motel tax continued to rise. Money collected from real estate transfers and building permits, however, decreased compared to 2022 due to low sales volume and higher interest rates.

"Some of this decline was expected, and budget projections were lowered in this category for 2023," Munch said. "However, we're still about 20% below those reduced expectations."

Munch said the first of four workshops for the 2024 budget will occur in August, leading up to the October release of a tentative budget. The budget and property tax levy will be approved by the city council in December.

"This is a very thorough process that we're confident will result in a budget that continues to guide the highest quality public services and maintenance of our most valuable assets," Munch said.