"The sales-tax figures are flat. We are seeing a status-quo budget next year," City Manager James Reams told the City Council at its last meeting.

Reams said this week the main sign of belt-tightening will be doing only one building project this year: a $1.8 million fire station in the southwest corner of the city. Other projects on the capital-improvement list - such as moving the City Attorney's office out of the 4th District Courthouse - will have to wait.

Sales taxes represent nearly 25 percent of the municipal budget, a factor that city officials credit for keeping the local property tax low. While the $19 million projected is $5 million more than the city collected five years ago, Reams and Administrative Services Director Jeff Pedersen said it is the same amount the city anticipates collecting by the end of this fiscal year on June 30. In the previous fiscal year, the city collected $19.2 million.

Reams said the city's sales-tax revenue has remained relatively flat because of the slowing the economy. But that's not the only reason.

Pedersen said Thursday that the proliferation of big-box retailers outside of the city has meant people are shopping outside the city, taking their sales-tax dollars with them. In the past, Orem was considered Utah County's major retail center, with stores and shopping centers practically lining University Parkway and State Street.

"All these things affect the city budget," Pedersen said.

While the city's budget will be a bit more conservative this year than in the past, he said there are still plans to give employees an annual raise, based on evaluating wages in other cities.

dmeyers@sltrib.com