City’s budget gap shrinks a tad

March’s sales tax collections were 1.81 percent higher than forecast in the current budget, reducing the city’s budget gap to $83,841.57.

Let me remind everyone, this does not mean the city is $83,000-plus in debt. It only means it has that much less to spend this year than it anticipated, kind of like that salesperson whose commissions were not as much as he or she expected and possibly budgeted for. It's also important to note that this $83,000 represents a miniscule 0.39 percent of the City's General Fund forecast for the current fiscal year and only 1.13 percent of the total forecasted sales tax revenues.

For the first six months of the current fiscal year, sales tax receipts have surpassed expectations in half of them. The problem is the average of three surplus months was $6,815.20 while the average for three deficit months was $34,762.33. That’s a significant difference.

The budget called for the city to collect $501,544 in sales taxes for March, the second lowest of any month so far this fiscal year. The collected amount was $510,619.29. These figures represent sales for the month of January.

It should also be noted that sales tax collections aren’t an ideal gauge of retail sales. Many food products are exempt. Taxes on motor vehicle sales and rentals are reported separately. The data is not seasonally adjusted, so it can only be compared to the same months in prior years. But online sales are taxed in Texas and are included in this tally. So tax collections are an unvarnished approximation for a large part of retail sales.

It is also worth noting that sales tax collections to date this fiscal year in Kyle are 10.65 percent higher than they were for the first six months of the previous fiscal year, which contrasts with the state as a whole, which is averaging 2.9 percent less in sales taxes than the year before. This is because statewide sales tax figures are far more dependent on manufacturing, wholesale trade and oil- and gas-related sales tax receipts than the Kyle economy is and those categories have been drastically under performing of late.

At the same time it is highly doubtful that the city’s population is 10.65 percent higher than it was the same time last year. So there’s that.