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Home My WebLink AboutIR 23-0752 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 23-0752 To the Mayor and Members of the City Council October 10, 2023 �s ad?? Page 1 of 4 I! SUBJECT: JULY 2023 — SALES TAX UPDATE "+qrF rn Yg7'3 Sales tax revenue represents approximately twenty-three (23%) percent of the City's General Fund anticipated revenue in Fiscal Year 2023. It is the second largest revenue source, with property tax being the largest at 58%. In addition, sales tax revenue represents the largest revenue source in the Crime Control and Prevention District (CCPD) Fund. Because sales tax represents a significant revenue source for the city and can sometimes be a volatile revenue stream, it is important for the city to closely monitor and report on monthly sales tax receipts. The Texas Comptroller's Office posted July 2023 (Fiscal Year 2023, Period 10) collection results on September 7, 2023. Actual receipts are dependent upon the timeliness and accuracy of sales tax payers' returns. Recent years have included legislative reform on remitting sales tax to the state comptroller, effects of a historic winter storm, and the effects of a global pandemic. The FY2023 Adopted Budget for sales tax were estimated based on higher than expected recovery from the pandemic and the possibility for an economic recession. Due to the potential fluctuation in the revenue source, the City takes a conservative, yet realistic, approach to estimating sales tax. CITY OF FORT WORTH YTD BUDGET& NET COLLECTIONS COMPARISON Adopted Amended Budget YTD Budget to Actual YTD Actual to Budget Budget As of July Adopted°la As of July Adopted'/a CITY OF FORT WORTH GENERAL FUND $212.147.461 $212.147.461 $174.399.326 82.2% $193.479.716 91.2% CCPD $102.073.793 $102.073.793 $83.911.448 82 2% 593.044.320 91.2% Total $314,221,254 $314,221,254 $258,310,773 $286,524,035 CITY OF FORT WORTH BUDGET COMPARISON —FY2023 Projected Adopted Amended Fiscal Year Variance to Adopted Budget Budget Projections ($) °d) CITY OF FORT WORTH GENERAL FUND $212.147,461 $212,147.461 $235.300.000 $23.162.539 10.9% CCPD $102,073,793 $102.073.793 $112.857.921 $10.784.128 10_6% Total $314,221,254 $314,221,254 $348,157,921 $33.936.667 10.8% • Both the General Fund and the CCPD Fund FY2023 Adopted Budgets are a 16.0% increase over the FY2022 adopted budget • Collectively, the General Fund and the CCPD Fund are expected to exceed the adopted budget by $33,936,667 or 10.8% at fiscal year end o This projection is conservative and may be amended later in the fiscal year ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 23-0752 To the Mayor and Members of the City Council October 10, 2023 Page 2 of 4 0VA SUBJECT: JULY 2023 — SALES TAX UPDATE fie COLLECTION DETAIL FOR CITY SALES TAX(FY2022 TO FY2023) General Fund July 22 July 23 Variance Variance (%) Current Period Collections $17.461.043 $18,307,060 $846,017 4.8% Other Collections* $300.463 $244,298 (56,155) (18.7%) Single Local Rate* $189,906 $190,620 714 0.4-% Audit Adjustments $32.219 ($191,138) (223,357) (693.2%) Service Fee (5359,672) ($371,017) (11,344) (3.2% Retainage $70,928 $58.207 (12,721) (17.9%) Net Collections $17,694,876 $18,238,029 $W,153 3.1% Op CCP0 Fund July 22 July 23 Variance ($) Variance Current Period Collections $8.436.923 $8.899.835 $462.912 5.5`Ye; Other Collections" $138,617 $118.350 (20,267) (14.6%) Single Local Rate' $91.687 $92.650 064 1.1% Audit Adjustments 315,173 -($94,378) (109,550) (722.0%) Service Fee ($173.648) ($180.329) (6,681) (3.8%) Retainage $29.880 $21.635 (8.246) (27.6%) Net Collections $8,538,632 $8,857,763 $319,131 3.7% *OTHER COLLECTIONS ARE PAYMENTS ATTRIBUTED TO NON-CURRENT COLLECTIONS INCLUDING PRIOR PERIOD, FUTURE PERIOD AND UNIDENTIFIED COLLECTIONS.SINGLE LOCAL RATE IS COLLECTIONS FROM REMOTE SELLERS WHO HAVE OPTED TO UTILIZE THE STATES ALTERNATE SINGLE LOCAL USE RATE OF 1.75%.THIS SINGLE LOCAL RATE CANNOT BE USED BY BUSINESSES LOCATED IN TEXAS.AUDIT ADJUSTMENTS JULY FLUCTUATE BASED UPON RESULTS OF TAXPAYER SALES TAX AUDITS CONDUCTED BY THE STATE OF TEXAS. July collections are comparable to the same month last year. • The General Fund net sales tax collections as of July are 110.9% compared to the adopted budget, and 103.1% compared to the same month last year. • The CCPD Fund net sales tax collections as of July are 110.9% compared to the adopted budget, and 103.7% compared to the same month last year. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 23-0752 To the Mayor and Members of the City Council October 10, 2023 Page 3 of 4 0VA SUBJECT: JULY 2023 - SALES TAX UPDATE fie The following chart indicates how FY2023 net sales tax collections in Fort Worth and other select cities in the state compare to FY2022 collections for the same period. CITIES COMPARISON-NET COLLECTIONS FY2023 vs. FY2022 City 1st Quarter 2nd Quarter 3rd Quarter July GARLAND 18.4% 8,4% 11.4% 18.9% ARLINGTON 3.2% (0.1%) (10.7%) 10.6% MCKINNEY 7.2% 3.7% 3.4% 7.7% I RVI NG 10.4% 14.4% 7.1% 5.7% PLANO 8.0% 10.4% 1 .5% 4.5% SAN ANTONIO 4.5% 5,5% 1 .1% 3,1% FORT WORTH 12.4% 11 .4% 4.1% 3.1% EL PASO 5.1% 6.1% 3.8% 2.6% HOUSTON 9.2% 10.8% 3.7% 2.6% DALLAS 10.4% 6.6% 0.4% 1 .9% GRAND PRAIRIE 5.9% 6.8% (4.6%) 0.8% AUSTI N 11 .1% 8.2% 2.7% (4.0%) FRISCO 14.4% 0.9% (5,8%) (4.8%) STATE TOTAL 9.4% 8.8% 4.5% 5.7% Source: Allocation Payment Detail and Monthly All Fund Revenue Report,Texas Comptroller of Public Accounts According to the Texas Comptroller of Public Accounts website, Comptroller Glenn Hegar states at the state-wide level that "Fiscal 2023 tax revenues were ahead of our projections in the Biennial Revenue Estimate released in January," Hegar said. "Franchise and insurance taxes were particularly strong in fiscal 2023. These taxes are based on the companies' activity in 2022, and year-over-year increases of 20 and 30 percent, respectively, are results of receipts elevated due to the high price of inflation last year. In addition, interest and investment income was up more than 72 percent in comparison with fiscal 2022, thanks to elevated interest rates and large cash balances in the state treasury." ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 23-0752 To the Mayor and Members of the City Council October 10, 2023 �s ad?? Page 4 of 4 I! SUBJECT: JULY 2023 — SALES TAX UPDATE "+qrF rn Yg7'3 Sales tax is collected on a variety of transactions besides the traditional retail industry and it is important to understand the various sources in order to anticipate any fluctuations. The following chart indicates the top five industries for sales tax performance over the past three years in Fort Worth, on a rolling 12-month period. TOP 5 PERFORMING INDUSTRIES 200,000,000 1S0,000,000 160,000,000 140,000,000 120,000,000 104,000,000 80,000,000 60,000,000 4-0,000,000 20,000,000 1Ldy2.0-kne21 JLdM-Jme22 JOV22-Jun e23 ■Department Stores ■Other Non store Retaiers ■Limited Service Eating Places ■Building MaterialsStores ■Elertrir Utilities Source: ZacTax(July 2023 data has not been released yet and will be updated once available) If you have any questions, please contact Clay Pearson, Interim Director of FWLab, at 817-392-6222. David Cooke City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS