(October 28, 2008)--As the economy continues on a downward spiral, cities across Central Texas have to tighten up their purse strings.

Expenses are on the rise and less money is coming in, forcing city governments to make some difficult decisions to stay out of the red.

This year balancing the checkbook has been anything but pleasant.

"We had a very, very stringent budget process,” Killeen Finance Director Barbara Gonzales said.

“It was probably, as the city manager put it, one of the most stringent budget processes that we have had in a long time."

That has forced Killeen to hold off on improvements to certain areas such as the street department. What money that is available is marked for public safety first.

The City of temple has had to do the same.

"There are some areas were we did tighten up, make some cuts,” Temple Finance Director Traci Barnard said. “No new personnel, no new services. Just maintain, sustain current levels of service."

Cities today are not getting the same return on their investments due to dropping interest rates.

Barnard says while Temple will get through this next year, some changes will have to be made in 2010 for the city to keep moving forward.

The combination of high fuel prices and low interest rates was forecast to hit cities hard, but now that fuel is dropping, it may help keep cities out of the red.

Other good news is that sale tax revenues for many cities are still on the increase even though they have slowed over the past few months.

“In comparison to the prior year, last year, we had an eight percent growth,” Gonzales said. “This year we have a five percent growth."

That along with a slowing housing market, which is producing fewer sales and more foreclosures, will have local cities keeping a watchful eye on the economy

"We've got to look at local, regional, national economies and those business cycles, and you just prepare and adopt to them as they come along,” Barnard said.

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