Page 26 - HurstFY23AnnualBudget

APPROVED BUDGET FISCAL YEAR 2022-2023

DEMOGRAPHICS AND ECONOMICS

Hurst is considered a major retail-
commercial center of northeast Tarrant Annual Sales Tax Revenue
County. North East Mall and a number of 25.00
24.31
quality shopping centers throughout the
24.00
City provide residents with a wide variety
of goods and services from which to
23.00
choose. North East Mall is central to our
economic success as sales tax continues to 22.00 21.92
be a major component of the city’s tax 21.35
20.90
revenue. However, the future of regional 21.00
20.29
shopping malls is changing and the malls
20.00
ownership, Simon Property Group, has
expressed interest in reinvesting in the
19.00
mall property that could result in a shift
from retail to housing, office space, and 18.00
other lifestyle-oriented development. The 2017-18 2018-19 2019-20 2020-21 2021-22
graph to the right illustrates a recent trend
of declining sales tax revenue heading into the pandemic. The increases in FY 2021 and FY 2022
exceeded expectations; however, the current state of the economy does not support a continued
upward trend. We believe much of the increase in due to unexpected pandemic spending on
home offices and other home improvements, federal stimulus programs, and inflation. The
increased revenue is largely offset by increasing costs associated with inflation. The FY 2023
General Fund sales tax budget includes a budget to budget increase of 7.2% and includes an
economic contingency of about 10%. The city maintains a conservative approach to budgeting
sales tax revenue at approximately 90% of the projected revenue. This helps mitigate any
negative and unexpected economic conditions. The City collects 2% of sales and use receipts from
businesses within the City. Based upon recent trends and conversations with North East Mall
ownership, we believe there will be a long-term shift with increasing reliance upon property tax
revenue. The city recognizes the importance of our relationship with North East Mall and is
working closely with mall ownership to plan for the next chapter in the mall’s life cycle.

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