Sales-tax collections were expected to take a hit when Burton Lumber moved from the city, so city officials were pleasantly surprised when the deficit did not materialize.

"Smaller businesses are doing well enough to absorb the loss we've experienced from Burton Lumber, so we were still able to come out ahead," said City Councilman Shane Siwik.

City officials project a 9.5 percent increase in sales-tax revenues for the coming year.

The bulk of the city's general-fund tax revenue - 65 percent - comes from sales tax, while property tax contributes 16 percent and franchise tax 19 percent.

"The economy has picked up - our bread and butter is sales tax," South Salt Lake Mayor Wes Losser said.

His comments came Tuesday in anticipation of a 2006 budget hearing scheduled for 7 tonight during the City Council's regular meeting.

The public hearing is set for City Hall, 220 E. Morris Ave.

When Losser took office in 2003, he put a freeze on any new city hires, and through attrition, the city staff has been trimmed down. It now runs leaner and more efficiently, Losser said.

"It's a terrific budget - one of the best I've seen. We've had to bite the bullet in the past and now we look forward to spending capital funds on areas that have been neglected," Losser said.

New parks and public-works equipment will be purchased, as well as public-safety vehicles.

After 2 percent cost-of-living increases last year, city employees could see pay hikes ranging from 6 to 8 percent this year.

The employee-wage increases will boost pay to competitive levels, Losser said, acknowledging that some wealthier cities will always be able to pay more.

cmckitrick@sltrib.com

South Salt Lake's proposed 2006 budget

* General Fund $17,337,000, up from $17,246,000 in 2005

* Capital Fund $1,823,000, up from $1,801,000 in 2005

New revenues:

* 9.5 percent increase in sales tax revenues

* 13 percent increase in new franchise taxes

* New domestic-violence impact fee

New expenditures:

* 15 percent increase in medical insurance for employees.

* 8 percent wage increase for police and firefighters.

* 6 percent wage increase for other city employees.

* 12 new police patrol cars, three motorcycles.

* 1 new fire engine.

* 2 public-works pickup trucks.

* New public works and parks equipment.

* 1 animal control vehicle.

* Lighting on State Street.

* Ongoing concrete replacement.