Economy and budget
The city budget is connected to household and business finances. Wages pay residents, residents buy goods and pay rent, and businesses need enough income to cover wages, premises, inputs, utilities and taxes.
Arcade changes city purchase prices and tax controls. Read Arcade vs Simulation before comparing costs between modes.
Reading the budget
Open Economy → Money. Separate ongoing income and spending from construction purchases and borrowing. A healthy cash balance after taking a loan is not the same as an ongoing surplus.
| Money coming in | Money going out |
|---|---|
| Income, sales, business and property taxes | Staff, services, building and road upkeep |
| Utility income and other operating receipts | Utility supply and operations |
| Loan or bond proceeds | Construction, buybacks and debt repayments |
Economy → Financial Reports shows income and spending over longer periods.
Taxes
- Income tax draws from residents' taxable income.
- Sales tax depends on taxable purchases made in the city.
- Business tax draws from business profit and can affect hiring and development.
- Property tax draws from assessed private property.
Raising a rate does not guarantee that revenue rises in the same proportion. Household pressure, trade, hiring and growth can change too. Compare the budget with Society → Households and Economy → Business after a change.
In Arcade, all four rates can be changed directly within their bands and take effect the next day. Votes, promises and bonds are disabled.
Staff, upkeep and road repairs
Arcade discounts construction, while staff and upkeep still cost the same as in Simulation.
The Roads budget maintains current condition at 100%; extra funding repairs accumulated wear. See Roads for maintenance and City services for service budgets.
Utility finances
The utility pages compare supply costs, customer charges, collections and unpaid bills. A large billed total may include money the city has not collected. Contract commitments can also cost money when the city uses less than it promised to buy.
See Utilities for prices, contracts and local facilities.
Loans and repayments
Bank loans are available over 10, 20 or 30 years. The displayed payment includes interest and repayment of principal. A longer term reduces the daily burden but leaves interest being paid for longer.
Paying debt down early reduces its payment. Repayments clear more expensive debt first.
There is no single fixed maximum loan for every city:
- Bank credit: $2.5 million plus 1% of assessed private property value, less the bank debt already outstanding.
- Total debt ceiling: $20 million plus 25% of assessed private property value. Bank loans, bonds and emergency borrowing all count toward it.
Both formulas apply in both modes. Remaining borrowing also depends on the room left under the total ceiling. A fall in property value can remove borrowing headroom even without a new loan.
Shortfalls and emergency borrowing
If the day's bills exceed available cash, the city can draw emergency borrowing up to its total debt limit. This is more expensive than planning the financing yourself and adds future repayments.
Once credit is exhausted, the city can fall into an overdraft and insolvency.
Simulation mode only: votes and bonds
Simulation requires a resident vote for increases in income, sales or property tax. Tax cuts and business-tax changes do not require one. Residents consider the burden, service need, previous votes and trust in the city's promises.
A measure can include a bond and a promise to build for a stated service. The forecast shows whether it will pass. If a measure promises work, read its purpose and deadline: placing a construction site is not the same as finishing the promised building.
Kept promises improve trust; broken promises damage it. The Votes section records what was agreed and whether it has been delivered. Cutting a promised tax rate before the obligation is complete can break the promise too.
Bond capacity depends on recurring revenue and credit rating, with existing bonds and total debt limiting the amount available. Residents must approve the borrowing.
Cash reserves
Keep enough cash for running costs and planned construction. Residents can also object when the city keeps excessive unused cash while collecting taxes. The normal reserve depends on running costs and population, and is adjusted for Arcade's lower construction prices.
Review the idle-cash information before raising taxes simply to enlarge the treasury. If household finances, utility bills or a budget change are causing a problem, start with Troubleshooting.