Sales tax surplus takes a hit, but don’t worry

First the bad news: June’s sales tax collections were below forecasts. Not by much, mind you — under 2 percent — but still below. Now the good news: For the fiscal year so far, the city is in the black and, barring an economic collapse bordering on the catastrophic, appears to be heading for a year-ending surplus, unlike last year’s somewhat embarrassing showing.

The city collected $611,511.36 in sales taxes this month, a figure that is $10,665.64 or 1.71 percent below what the fiscal year budget anticipated, but $42,640.39 or 7.5 percent more than was collected during this same month last year. Those last two numbers are important because they provide a convincing argument that the city is not heading into any sort of cataclysmic economic event that would result in the city ending the year with a budget gap caused by problematic sales tax projections.

To date, the city has collected $162,739.35 more than projected in the current fiscal year budget. You can do the math yourself and if you do you can see for what the average monthly deficit would have to be in the final three months of this accounting period for the city to end with a deficit. And when you consider this was only the second month this fiscal year that collections fell below projections, you can easily see why I am optimistic the city will end this fiscal year in the black. Not only that, the only other time collections failed to meet forecasts — in February (a notoriously under-performing month in Kyle’s collections for reasons I guessed at back then) — the shortage was in the neighborhood of $36,000, a significant number, to be sure, but still $18,000 less than the city would have to average losing in July, August and September to erase the current surplus. That’s why I feel confident in predicting that’s not going to be the case, unlike 2017 when the city finished with a sales tax budget gap of $286,810.12. And even then, collections for the final three months were a minus $72,398.73, less than half of the current surplus.

In short, as far as sales tax collections go, the city is looking good.