Most area cities have shrunk their projected expenditures for 2009-10, compared to 2008-09, in response to lower revenue and the poor economy.

On average, cities estimated spending about 6 percent less this year, compared to estimates made at this time last year.

Aubrey Mayor Gary Hammett said city leaders saw tough times coming last year, when construction came to a standstill, and city departments mostly weren’t allowed to increase their spending.

Only the fire department made one new hire, which it had needed for several years.

“We’re hoping that things will pick up a little,” Hammett said.

Aubrey increased its property tax rate from 52.624 cents per $100 valuation to 54.659 cents. The average house value in Aubrey dipped about 1.6 percent from 2008 to 2009, which means the city taxes for that house would be about $13 more this year.

Like most area cities, Aubrey depends on sales and property tax revenue, but Hammett said he’s concerned that Aubrey also has seen its franchise tax revenue shrink.

Franchise tax revenues also are tied to the economy, he said.

“People cancel their cable [subscription], or cut their landline and keep their cellphone — that cuts franchise taxes,” Hammett said. “Or they cut back on their gas or electric, and keep their house a little colder — that affects franchise revenue, too.”

While Texas is faring better than most of the nation, Sanger’s city manager, Mike Brice, said he’s still concerned about the economy.

“Our sales tax is still flat — which is good compared to the 10 percent drop other cities are seeing,” Brice said. “We’ve made the cuts we need to make to get by. We’re running a real lean operation.”

Sanger hasn’t laid off any employees or cut services, but Brice said city leaders remain cautious about the future.

“Property taxes are basically a year behind,” Brice said. “We aren’t based on 2009 right now, we’re based on 2008. The slump in property taxes is a year or two down the road.”

In other words, he said, the economy could recover overall but property tax revenue would remain a problem.

Sanger did not increase its property tax rate this year; it remains at 62 cents per $100 valuation. The average home value in Sanger also dipped, about 1.9 percent, so the owner of that house would pay about $13 less in city property taxes.

Brice said he pays close attention to the unemployment rate and the foreclosure rate as he plans for the future.

“Until the employment rate gets better, a lot of people are going to be behind,” he said. “They’re not spending money on other stuff and generating sales tax.”

“I hope it’s like they’re [economic experts] saying — that it’s going to get better in the first quarter of next year,” Brice said.

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her e-mail address is pheinkel-wolfe@dentonrc.com.

CUTTING COSTS

Most area cities planned their 2009-10 budgets for the uncertain times, committing to fewer expenditures compared to 2008-09. Below is a list of the changes in projected spending by area cities, compared to the same time last year.

Dish: -28.7%

Denton: -13.9%

Copper Canyon: -11.1%

Aubrey: -9.9%

Shady Shores: -9.9%

Argyle: -9.3%

Pilot Point: -4.8%

Sanger: -2.3%

Corinth: -1.1%

Bartonville: -0.2%

Lake Dallas: +0.2%

Hickory Creek: +0.5%

Double Oak: +4.5%

Ponder: +4.5%

Krugerville: +13.6%

Krum: +17.7%

Oak Point: +26.6%

SOURCE: Staff research