Page 54 - GrapevineFY24 Adopted Budget

In order to make sense of sale tax revenue, the sales tax moving average tool is utilized to zoom
in on small changes and to help identify trends. This is accomplished by computing the
difference between a 12-month average and a 36-month average. When the 12-month moving
average is above the 36-month moving average, growth is rising, as most local governments
would like to see. When the moving averages rise to the point that the gap is wide, concern
should be registered as to the sustainability of such a rise. When the 12-month narrows, touches
or finally goes below the 36-month moving average, a yellow flag should turn to red, as this
could be an indicator of trouble on the horizon. At some point the actual revenues collected will
decline in absolute terms if the downward trend is steep enough or long enough.

The chart dramatizes the data spread so that the tremors can be better identified, along with the
trend. The city’s 12-month moving average briefly dipped below the 36-month moving average
(negative growth) in fall 2017 and most recently during the COVID-19 pandemic. However,
since bottoming out in April 2021, sales tax has experienced unprecedented growth peaking in
November 2022. Throughout the rest of FY23, the 12-month and 36-month moving averages are
approaching each other signaling reduced momentum.

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