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Sales tax collections fall below city budget estimates
Monday, March 24, 2008 by Austin Monitor
Despite a good month of sales tax collections in January, the city is not on target for its yearly projections—which called for 7.6 percent growth in revenues this year—according to a memo to the Council from city Chief Financial Officer Leslie Browder.
As a result, department directors are being asked to get permission from their Assistant City Managers before “filling personnel vacancies and making discretionary spending purchases,”
Canally said the decision affects 225 vacancies, about 6 percent of 3,694 positions. Enterprise fund departments such as Austin Energy and the Austin Water Utility are not affected by the downturn.
“Sales tax is one of our really important sources of revenue and it’s a very volatile revenue,” said
“This is a good example of how our staff monitors this important revenue,” Dunkerley said. “So this is very normal for us to be monitoring and for us to be considering some voluntary slowdown in purchases until we know how things are going to be going the rest of the year. We’re on top of it.”
Council Member Brewster McCracken said, “The sales tax figures demonstrate that
Canally said that the city has received $52.7 million for the first four months of this fiscal year, October-January. Budget writers had projected collections of $54.1 million for those four months.
He hastens to point out that four months does not make a trend. However, financial planners and the City Council are well aware that
“We’re not doing a hiring freeze but we’re doing something that is one step removed from a hiring freeze,” McCracken noted.
Council Member Sheryl Cole said, “If our sales tax revenues decline, we will be forced to deal with the reality of our economic situation … I do not think we will impose hiring freezes but we must plan to always balance our budget.“
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