Budget gap widens as sales tax receipts continue to fall below forecasts

December’s sales tax receipts were $10,988.91 below forecasts, widening the city’s budget gap to $40,629.31, which is definitely not insurmountable but does raise some concerns because of where the city was at this same exact point last year.

Instead of being $40,000 in the hole at this time last year, sales tax receipts through the first three months of the fiscal year just ended had provided the city with a $187,932.03 surplus. However, by the end of FY 2015-16, the city was close to $282,000 below forecasts, which means that during the last nine months of the fiscal year, the city lost $469,000. A repeat of that would put the city in a half-million hole this year and that’s not exactly where it wants to be.

This is also troubling because this fiscal year the city scaled back projected increases, forecasting almost a 5 percent less gain than they predicted last year. I asked the city’s crack Finance Director Perwez Moheet about this and he promptly replied "I do not have any theories as to why sales tax receipts continue to fall below forecast."

This is not alarming news because the city has plenty in reserve to cover this but it is disturbing because it appears to be a trend, but a trend of what remains a mystery. The first answer that comes to mind is that a recessionary economic trend is developing but I’m not sure I can buy (pardon the pun) into that theory since in actual numbers, sales tax receipts this month were $65,560.84.greater than they were for last December and for the year, to date, receipts are 12.74 percent higher than in FY 2015-16. So I’m simply going to go with the notion that the city’s outlook for its ciizens’ spending capacity was rosier than the reality,