Despite a slight dip in June sales tax revenue, the City finished Fiscal Year 2022-23 strong, Chief Financial Officer/City Clerk Jason Muninger said this week.
The year ended with a sales tax revenue increase of 3.4 percent compared to the year before and with use tax revenue netting a whopping $1.85 million since being implemented in January.
Sales tax
“We were actually down about half a percent in June, which is the last month in the City’s fiscal year,” Muninger said. “But that was comparing back to some very high numbers, so the month was actually pretty flat. With collections being high last June, even being in the same ballpark this year is a win, in our estimation.”
For Fiscal Year 2022-23 overall, the City received $23.2 million in sales tax revenue between July 1, 2022, and June 30, 2023, well over the anticipated amount.
“Looking at the total fiscal year, we were $761,000 over the prior fiscal year. That’s about a 3.4 percent increase over the previous year’s collections,” Muninger said. “We budget very conservatively, so that put us about $2.2 million over the estimated budget, which is about 10 percent over the amount of sales tax revenue collected the year before.”
Muninger said revenue for July, the first month of the new fiscal year, was up 5 percent compared to the same period last year.
“July collections were $1,986,000, which is an increase of about 5 percent over what was collected during this time last year, and that was a very good month for revenue as well,” he said. “We budgeted the same amount for this July that we received last July, so we’re $101,000 over budget so far this fiscal year.”
With only a couple of exceptions, City sales tax collections have shown increases over the past two years, many times with record highs. Local shopping, inflation and stimulus funds are thought to be factors in the increases.
Use tax
Less data is available on the City’s use tax collections, as the tax went into effect Jan. 1 of this year. But so far it has yielded substantially more revenue than was initially anticipated.
“Because this is a relatively new tax for us, we don’t have a lot of history to go by,” Muninger said. “We conservatively estimated this revenue would be around $400,000, but we surpassed that by quite a bit. We collected $1.5 million in use tax revenue over the first four months the tax was in place. Whether that trend will continue or not, we have no way of knowing. It’s simply an uncertainty until more data is available.”
Muninger said $2.5 million in use tax revenue is budgeted for FY 2023-24.
“We just don’t know what factors might impact fluctuations in use tax revenue, and we probably won’t know that until we can track it for a year or two — probably closer to two,” he said. “But the collection for June was $368,000, which is $160,000 over what was budgeted, and that’s only one period into Fiscal Year 2023-24.”
Use tax revenue is currently allocated to the General Fund, supplementing sales tax funds. The City’s General Fund is used to fund nearly all City operations, including police, fire, public works and administrative departments.