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City sales tax collections drop 5 percent from this time last year

Thursday, August 12, 2010 by Austin Monitor

Even though statewide sales tax collections for the month were up 2.2 percent over the same month last year, the City of Austin is receiving about $700,000 less than it did last August, according to Chief Financial Officer Leslie Browder. That’s a 5.2 percent drop.


Comptroller Susan Combs released statewide and local sales tax collection numbers on Wednesday, and Austin wasn’t the only major city getting bad news. Fort Worth also experienced a decline in collections. Meanwhile, San Antonio, Dallas, and Houston saw increases for the month.


Browder explained the situation in an email to the mayor and Council Wednesday, “We received $12.8 million this month compared to $13.5 million in August 2009, a decrease of 5.2 percent,” she wrote. “We received a negative audit adjustment this month of $491,000 and when compared to the same month last year, in which we received a positive audit adjustment of $441,000, these two factors tended to drive our percentage down this month.”


So, while painful, the latest report — which represents money collected in June — does not indicate a trend. Browder pointed out, “Absent these adjustments, our sales tax revenue would have been up 3.3% this month, which represents current period collections as reported by the State Comptroller.”


Browder said that on a cumulative basis, for the first nine months of fiscal year 2010, Austin’s collections are up 2.6 percent compared to last year.


Asked whether this situation might have a negative impact on next year’s budget, Budget Officer Ed Van Eenoo said budget office employees had projected a 3 percent overall growth rate in sales tax and the city is not far behind that right now.


However, Austin got $14.5 million in sales tax collections in August 2008, then $13.5 million in August 2009 and $12.8 million this year.


In other regional tax-collection news, Round Rock was up 29.1 percent for the month. They received a prior period adjustment this month that totaled close to $1 million. San Marcos, with its heavy retail, saw an increase of 4.1 percent. Sunset Valley, which also has a lot of retail, reported relatively flat revenue, while collections in Bee Cave were up 10.7 percent and Capital Metro were down 7.3 percent.

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