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COLUMBIA (WACH) -- A month after announcing a budget surplus, city of Columbia officials now say a $1 million budget shortfall is looming.

According to The State Newspaper, City Manager Steve Gantt says the city can no longer use the hospitality tax fund to chip away at the deficit and that there's nothing left in the budget to cut.  Gantt suggests a tax increase may be in order to make up the difference.

Gantt tells the paper he wants to increase SCE&G's franchise fees that would, in turn, increase residents monthly electric bills.

This year, city officials spent $65,000 on a contract with P.J. Noble and Associates to promote a North Main streetscaping project along with hundreds of thousands of dollars to attract businesses to the North Main Plaza.

In August, WACH Fox News reported on the city's $1 million deficit.  In an email, the city of Columbia accused us of inaccurately reporting that number.

According to the newspaper's report, that number is correct.

WACH Fox News called City Manager Steve Gantt's office for comment Wednesday.  Our message has not been returned.

Keep checking back for more on this story as it develops.