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Home My WebLink AboutIR 23-0763 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 23-0763 To the Mayor and Members of the City Council November 7, 2023 �s ad?? Page 1 of 4 I! SUBJECT: AUGUST 2023 — SALES TAX REVENUE UPDATE "+qrF rn Yg7'3 Sales tax revenue is 23% of the City's General Fund FY 23 revenue, making sales tax the second-largest General Fund source of revenue following property tax (which is 58% of total). 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 August 2023 (Fiscal Year 2023, Period 11) collection results on October 11, 2023. Actual receipts are dependent upon the timeliness and accuracy of sales tax payers' returns. Recent years have witnessed significant swings to the economy and retail sales including 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 Ad �rin,lll Amended Budget YTD Budget to Actual 'TO Actual to B i i d I r Budget As of August Adopted% As of August Adopted% CITY OF FORT WORTH GENERAL FUND $212,147,461 $212.147,461 $191 964.632 90.5% $212,365.166 100.1 CCPD $102,073,793 S102,073,793 S92.362.916 905% $102,071,799 100.0% + Total $314,221.254 $314,221,254 $284,327,547 $314,436,964 CITY OF FORT WORTH BUDGET COMPARISON —FY2023 Projected Adopted Amended Fiscal Year Variance to Adopted Budget Budget Projections CITY OF FORT WORTH GENERAL FUND $212,147,461 $212,147,461 $236.300.000 $23 162 639 10.9% op CCPD $102,073,793 $102.073.793 $112 867.921 $10,784,128 10.6% Total $314,22.1,254 $314,221,254 $348,151,921 $33,936,667 10.8% op *THE AMENDED BUDGET HAS NOT CHANGED FROM ADOPTED BUDGET FOR THE SALES TAX REVENUE • 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 $33,936,667 or 10.8% at fiscal year end ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 23-0763 To the Mayor and Members of the City Council November 7, 2023 �s ad?? Page 2 of 4 SUBJECT: AUGUST 2023 — SALES TAX REVENUE UPDATE "+qrF rn Yg7'3 o Projections are conservative and may be amended later in the fiscal year COLLECTION DETAIL FOR CITY SALES TAX(FY2022 TO FY2023) General Fund August 22 August 23 Variance ($) Variance °Ioy Current Period Collections $17,870,313 $18.896,891 $1,026.577 5.7% Other Collections* $1,054,972 $702.969 (352,003) (33 4 Single Local Rate* $199.892 $203,446 3,553 1.8% Audit Adjustments $100,035 ($517,742) (617,777) (617 6%) Service Fee 1$384.504) ($385,711) (1,207) (0 3%) Retainage ($24,335) ($14.401) 9.935 40.8% Net Collections $18.816,373 S18.885,451 $69,078 0.4% T CCPD Fund August 22 August 23 Variance (S) Variance (%) Current Period Collections $8,627257 $9.024,660 $$397,403 4 6% Other Collections* $528A53 $361,123 (167,330) t31.7%) Single Local Rate" S96,750 $97,218 469 0.5% Audit Adjustments 552,327 ($267,303) (319.630) (610.8%) Service Fee ($1 K096) ($184,314) 1,782 1.0% Retainage (512.199) S3,905) 8,294 68.0% Net Collections $9,106,492 $9.027,479 ($79,013) (0.9%) 1�l *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 AUGUST FLUCTUATE BASED UPON RESULTS OF TAXPAYER SALES TAX AUDITS CONDUCTED BY THE STATE OF TEXAS. August collections are comparable to the same month last year. • The General Fund net sales tax collections as of August are 110.6% compared to the adopted budget, and 100.4% compared to the same month last year. • The CCPD Fund net sales tax collections as of August are 110.5% compared to the adopted budget, and 99.1% compared to the same month last year. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 23-0763 To the Mayor and Members of the City Council November 7, 2023 Page 3 of 4 0YA SUBJECT: AUGUST 2023 - SALES TAX REVENUE 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 August GARLAND 18.4% 8.4% 11.4% 18.9% 30.2% MCKINNEY 7.2% 3.7% 3.4% 7.7% 7.2% DALLAS 10.4% 6.6% 0.4% 1.9% 5.6% PLANO 8.0% 10.4% 1.5% 4.5% 3.8% SAN ANTONIO 4.5% 5,5% 1.1% 3.1% 1,9% HOUSTON 9.2% 10.8% 3.7% 2.6% 1.7% ARLINGTON 3.2% (0.1%) (10.7%) 10.6% 1.1% FORT WORTH 12.4% 11.4% 4.1% 3.1% 0.4% AUSTI N 11.1% 8.2% 2.7% (4.0%) (0.4%) GRAND PRAIRIE 5.9% 6.8% (4.6%) 0.8% (0.7%) EL PASO 5.1% 6.1% 3.8% 2,6% (2.0%) I RVI NG 10.4% 14.4% 7.1% 5.7% (4.0%) FRISCO 14.4% 0.9% (5.8%) t4.8%) (4.6%) STATE TOTAL 9.4% 8.8% 4.5% 5.7% 2.8% Source:Allocation Payment Detail and Monthly All Fund Revenue Report,Texas Comptroller of Public Accounts According to the Texas Comptroller of Public Accounts website, Texas Comptroller Glenn Hegar announced on Oct 11, he will send cities, counties, transit systems and special purpose districts $1.1 billion in local sales tax allocations for October, 4.5 percent more than in October 2022" 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 ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 23-0763 To the Mayor and Members of the City Council November 7, 2023 �s ad?? Page 4 of 4 I! SUBJECT: AUGUST 2023 — SALES TAX REVENUE UPDATE "+qrF rn Yg7'3 five industries for sales tax performance over the past three years in Fort Worth, on a rolling 12-month period. TOP 5 PERFORMING INDUSTRIES mu,u00,000 180,000,000 160,000,000 140,00Q000 120,000,000 100,000,000 90,GN,000 60.000,000 40,000,000 20,000,000 Aug201uly21 Aug21 July22 Aug2-2•July23 ■Department Stores ■Other Nonstme Retaileis E Limited Service Latbig Places ituildinr!M 4teri-jts 5tnrf•- a rts-rlrir R Iti6tiPs Source:ZacTax(August 2023 data has not been released yet and will be updated once available) If you have any questions, please contact Clay Pearson, Interim Chief Transformation Officer, FWLab, at 817-392-6222. David Cooke City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS