Saturday, August 26, 2017

Sales Tax Budget Varies Widely in Two Weeks

San Angelo's City Council heard two sales tax stories in recent budget sessions.  On August 22nd staff proposed a 3% sales tax increase over current budget for the city's general fund.  On August 8th staff proposed a large decrease in sales tax revenues for economic development.

So which is it, a projected 3% increase or a large decrease?  It cannot be both.  Sales tax revenue for the development corporation and general fund are directly correlated.

Using the general fund assumption of $17 million in sales tax revenue for the coming year the Development Corporation would have $8.5 million.  That's $650,000 more than budgeted.

There's a disconnect between 2017-18 sales tax projections in staff budget presentations.  City Council and the public deserve a consistent story from staff.

Update 9-23-17:  The COSADC Board background packet for 9-27-17 shows over $8 million in sales tax revenue with one month left in the fiscal year.  The development corporation will end the year with sales tax roughly equal to last year, i.e. no decline.  The city believes it will rise 3%.  So why the $800,000 sand bagging?  Is it to fund the Sunken Gardens park, also on the September agenda?  The Railway Museum might have serious regret for not shopping around for a new home.

Update 11-5-17:  Finance Director Tina Dierschke told the Development Corporation Board that sales tax revenues had been up the last four months in a row .

Update 11-19-17:  Sales tax revenue is up nearly $300,000 or 11% from last year.  That's the story City Council will hear on 11-21-17.

Update 2-2-18:  The Development Corp decided to adjust sales tax revenue up to coincide what the city budgeted.  Sandbag removed!

Update 3-18-18:   Sales tax revenue is "over budget for revenue by $822,919 year to date."  That's from the city's higher number, not COSADC's lowball budget.  City Council will hear the report on March 20th.

Update 11-3-18:  Finance Director Tina Dierschke admitted sales tax came in much higher than budget for the closed fiscal year.  Staff never addressed the discrepancy between the city and the Development Corp's sales tax revenue projections. 

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