Austin, Round Rock, sales tax revenues fall slightly

The City of Austin has reported its first sales tax figures for FY2009, a 1.4 percent decline for the month of October. Comptroller Leslie Browder noted in a memo today that the city “received $12.2 million this month compared to $12.4 million” for October of last year.

 

The city’s budget is based on a projected 3 percent increase in sales tax revenue in 2009, so the 1.4 percent drop is a notable barometer of the city’s slowing economy. Other cities in central Texas are also feeling the pinch. Round Rock saw a 3.3 percent decrease for the month, and revenue for San Marcos, which is heavily dependent on retail shoppers, fell 5.5 percent. Sunset Valley also fell 4.4 percent and Bee Cave was flat, according to Browder. “Overall, growth for the Austin/San Marcos region decreased this month by 1.6 percent compared to the same month last year,” Browder said.

 

To deal with the likely shortfall in sales tax revenue in 2009, the City Manager’s office has asked department heads to begin identifying possible cuts. The Manager and the Budget Office will brief the Council on those cost-saving strategies in January and receive directions on which ones to implement.

 

“We are simply trying to be proactive in regard to asking all the department heads to consider a two percent reduction,” City Manager Marc Ott told the Council on Thursday. “There has been misunderstanding about what we’re doing.” While the goal is to find a total of $15 million in cost reductions, Ott said each department head would be expected to use discretion in selecting which options to recommend. “We are not talking about an across-the-board flat cut,” he said. “That would be irresponsible. That’s not what we’re doing. They are actually developing options for us, creating a menu of things that…we could select from.”