Page 104 - HurstFY23AnnualBudget
P. 104

APPROVED BUDGET FISCAL YEAR 2022-2023









               Sales  tax  revenues  are  the  most  difficult  to  project  for  the  operating  budget  because  the
               increases  in  revenues  sources  are dependent  upon  area  economic  conditions  and  consumer
               confidence. In fiscal year 2022-2023, sales tax is projected at approximately $9.9 million. The
               2022-2023 sales tax budget total has an economic contingency of approximately $1,000,000 or
               approximately 10% of estimated collections included. This allowance has and will continue to
               help offset any decreases in sales tax collection caused by economic conditions. During fiscal year
               2021-2022, the City recorded monthly sales tax increases for 11 out of the 12 months and ranged
               from  a  -2.4%  decrease  to  a  25.7%  increase  over  the  prior  year.    The  current  economic
               environment,  prior  economic  stimulus  programs,  and  inflationary  pressures  all  contribute  to
               continuing our conservative approach to budgeting sales tax revenue.



                                        PROPERTY & SALES TAX REVENUE

                  30.00                                                                                  60%
                  25.00                                                                                  50%
                  20.00                                                                                  40%
                  15.00                                                                                  30%
                  10.00                                                                                  20%
                   5.00                                                                                  10%
                    -                                                                                    0%






                                    Property Taxes    Sales Taxes     Sales Tax as Percent of Revenue


               The  chart  above  shows  revenues  generated  by  property  taxes  for  both  General  and  Debt
               Service Funds,  plus  sales  taxes  for  the  General  Fund.  Together,  property  and  sales  taxes
               account  for approximately  70%  of the  General  Fund  revenues.  It  has  been the  policy of  the
               City  Council  to  grant  property  tax  relief  to  citizens  to  partially  offset  increases  in  appraisal
               values. Over the past twenty  years,  well  over  $20  million  in  property  tax  relief  has  been
               granted  through  tax  rate reductions alone. The City also provides the maximum homestead
               exemption  and  additional  tax  relief  for  senior  and  disabled  residents.  The  primary  driver  of
               property and sales tax is economic strength  and  consumer  confidence.  Sales  tax  projections
               for 2022-2023 have once again been budget conservatively.

               Beyond  property  and  sales  tax  revenue,  franchise  taxes  account  for  approximately  6%  of
               budgeted revenues or $2.51 million.  The Texas Legislature has eliminated various components
               of franchise fees over the last few years making this a difficult category to project; however, we
               have  researched  details  of  the  legislative  changes  and  spoken  with  telecommunication
               providers to better understand how the changes will impact this revenue stream.  Together
               with an analysis of recent trends indicate that $2.51 million is a reliable revenue budget for FY
               2022-2023.  Together with property and sales tax revenues these three categories account for
               approximately 76% of budgeted revenues.



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