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City reports slightly smaller sales tax drop

Thursday, August 13, 2009 by Austin Monitor

There’s good news and there’s bad news.


The good news is that the city is reporting a sales tax payment of $13.5 million this month compared to $14.5 million for the same month last year, a decrease of 6.8 percent, not nearly as much as in recent months. According to Chief Financial Officer Leslie Browder, the drop would have been greater had the city not received “a high, positive audit adjustment of $441,000.” 


In a memo released this morning, Browder wrote, “Audit adjustments we have seen over the last nine months have averaged close to $100,000.” But the bad news is this: “ Had we realized an audit adjustment close to the average amount so far this year, our monthly sales tax revenue would have been about 9.2% below the same month last year and 9.8% less on a cumulative basis.”


Collections are down 9.5 percent compared to the same nine months last year, she said. This is in line with the 10 percent decline predicted by budget analysts earlier this year.


She also notes that overall, “the Austin/San Marcos MSA was down 6.7% this month. Round Rock was down by 19.9% for the month and 12.3% year-to-date. San Marcos, with a lot of retail, saw a decrease of 0.5% this month.  Year-to-date, San Marcos is down by 2.3%. Sunset Valley, which also has a lot of retail, was down by 5.4% this month compared to last year. Sales tax collections in Bee Cave showed a decrease of 7.7%. Capital Metro was down by 8.2% for the month.”


Other major Texas cities also saw a decline, with Dallas suffering the worst hit at 14.5 percent. This week Dallas’ city manager announced layoffs of 840 city employees on Oct. 1. San Antonio’s collections declined 8.5 percent, followed by Austin and Fort Worth at 6.3 percent. Houston’s collections declined 6.2 percent.

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