Page 124 - CityofWataugaAdoptedBudgetFY24

BUDGET SUMMARY

Sales Tax Collections

The second major financial consideration that guides the development of the budget for
the upcoming year is the projection of sales tax revenues. The City's 1.25% share of all
local taxable sales are remitted by merchants to the State Comptroller’s Office and then
distributed to the City on a monthly basis. Sales tax revenues comprise 28% of General
Fund (GF) revenues. The City has experienced better than anticipated sales tax and this
year and we are forecasting FY2022-2023 sales tax revenues to end the year
approximately 2.5% over budget expectations and 5% higher than FY2021-2022 actuals.
Sales Tax for FY2023-2024 is projected to be 2% above the current year forecast for the
1.25 cent sales tax.

In May, 2021, voters approved a one and one quarter cent sales and use tax for general
government services. This allows for additional revenue to operate and provide public
services. The additional ¼ sales tax is used for general government services and will
provide funds for continuing street maintenance.
Sales Tax revenue for
the City is subject to the
general economic
environment of the DFW
Metroplex. The City
continues to see growth
in economic activity for
current businesses,
attraction of new
businesses, and online
sales tax growth. The
gains from sales tax are
also attributable to
inflation with the higher
cost of goods and
services.

Other taxes - Include receipts from the operation of bingo halls in the City.

Utility Franchise Fees – This revenue category consists of a percentage of local gross
receipts remitted to the City by each privately owned utility (electric, telephone, gas, waste
and recycling collections, and cable) providing services to Watauga citizens for their use
of the City’s right-of-way. This can be the right-of-way used by the companies for their
utility lines or the use of our streets for their vehicles. Revenues are based on terms of a
franchise agreement between the City and each utility. The majority of franchise revenue
is based on a percentage of gross revenues from the utilities.

Projected revenues for these fees are generally based on population estimates. Recently,
weather conditions and the economy have been significant factors in a decline of
revenues as citizens have been more frugal in utilization of resources, which has led to
lower utility revenues. In addition, the Texas Legislature passed Senate Bill 1152 which

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