City Sales Tax Collections Remain Steady

TYLER — City of Tyler sales tax revenues deposited for the month of February have increased .58% as compared to February 2010, resulting in a 3.78% cumulative year-to-date increase. City officials explain that the current month increase was 1.51%; however, an out-of-period audit adjustment resulted in the .58% increase.

The reported revenue of $3,927,247.40 comprises of $2,618,164.93 general sales tax revenue and $1,309,082.47 half-cent sales tax revenue. The figures represent receipts from December 2010 collections as there is a two-month lag before taxes are reported and remitted back to the City from the State.

“The City budgeted for a two percent increase in sales tax revenue for 2010-2011, so we are staying on track to meet our budget projections,” said City Manager Mark McDaniel. “We will continue to watch expenditures closely heading into the next budget cycle as another difficult fiscal year is anticipated due to deflated property values and a slow economic recovery. One of our biggest concerns at this point is potential ramifications from budget cuts at the State level.”

The City received more than $1.1 million in State funding this fiscal year, of which $722,000 came from Federal grants passed through the State. “The Federal funding passed through the State is primarily special law enforcement grants, as well as transit and transportation funding,” explained McDaniel. “Some of this funding may no longer be available on the Federal level. Additionally, the State may choose to eliminate some of its funding to help balance the State budget or pass along unfunded mandates to the local level.”

The law enforcement grants account for more than $200,000 of the total State funding and allow for special enforcement programs such as the Auto Theft Task Force and Click It or Tickit programs. “If the State chooses to reallocate these funds in the future, most likely we will cease these special enforcement programs,” explained Police Chief Gary Swindle. “However, it would not cause us to lose officers as most of this State funding is used for overtime pay.”

State funding only represents 1.2% of the City’s operating budget. Although the cessation of the grants would not result in staffing decreases, there is concern that the State could choose to require cities to continue the programs without providing the funding. “The potential of unfunded mandates or fees emerging from the State budget process is something we are watching closely,” added McDaniel. “Over the last two years we have worked diligently to balance our budget and make the cuts needed to stay within our means. Mandates to continue former State programs with local resources could be devastating to city budgets.”

In 2010, the City of Tyler froze more than 125 positions mid-year, delayed capital expenditures, renegotiated contracts, launched a Lean Sigma efficiency program, limited salary adjustments and took many other actions to ensure the City ended the year in a positive financial position. “Tyler is in a much better position that many other cities across the country,” shared McDaniel. “Because we have no general obligation debt and pay cash for most capital improvement projects, we are able to respond to changing financial conditions. And thanks to our Blueprint, Called to SERVE and Lean Sigma programs, Tyler has maintained its culture of continuous improvement for greater efficiencies.”