Page 358 - CityofSouthlakeFY27Budget

TABLE OF CONTENTS

SALES TAX DISTRICTS

Southlake Sales Tax Districts

As with all other special revenue funds, sales tax districts revenues are designated for specific purposes.
Special Revenue Funds
State law regulates both the types of sales tax districts cities may utilize and the use of their funds, and
the final approval of all sales tax districts is up to the voters. In Southlake, the total sales tax rate is 8.25%.
Of that, the City receives a $0.02 of sales tax for every dollar spent in our city limits (the remainder goes
to the State).

One of those pennies ($0.01) goes to the General Fund and can be spent on general operating costs,
like supplies, salaries, and general maintenance. The other penny is split between our Crime Control and
Prevention District (CCPD), the Southlake Parks Development Corporation (SPDC), and the Community
Enhancement and Development Corporation (CEDC). The money collected in these districts can only
be used for the purposes outlined in the original referendum presented to the voters, so we set up
separate funds to account for the revenues and expenditures of each unit.

How does sales tax benefit Southlake residents?
We estimate that non-residents that shop and dine in Southlake generate up to 70% of the sales tax
revenue. Why is this important? This means that “imported tax payers” visiting the City are supporting
a large portion of the bill for important infrastructure and services that these funds provide. These
monies are used to fund parks development, crime prevention and safety initiatives, construction and
operations of The Marq Southlake, and economic development, as well as pay off the debt for these
funds. Utilizing special sales tax districts has allowed the City of Southlake to maintain an excellent
financial condition and reduce the property tax burden. In FY 2027, about 28% of the total debt service
is adopted to be repaid using sales tax collected for these districts.

Southlake’s strong shopping and dining economy has helped maintain steady sales tax growth since the
economy began recovering from the recession in 2011. For FY 2027 we anticipate total sales tax revenue
to be $48,917,600. Figure 3 shows the sales tax collection since 2022.

The remainder of this section will provide more detail about each of the special sales tax districts and
their uses.

358 FY 2027 City of Southlake | Budget Book