On April 17, I started to write this post, but got busy and never finished:

In early 2003, former city manager Ted Benavides had to announce to the city council that his sales tax projection — one of two taxes that prop up the city budget — was a tad off. He and the staff had overestimated revenue by tens of millions of dollars. The result? To quote Dallas’ Only Daily Newspaper on Oct. 25, 2003: "Revenues have plummeted, and maintaining even the most basic services is a struggle."

Those of us who were here at the time know things were that bad. I’m not saying that we’re headed down that path again, but I shouldn’t have waited to make this post. The sales tax numbers look like they’re taking a header again.

At yesterday’s city council meeting, according to a report on Channel 5 this morning (which I can’t find on the station’s web site to link to), city officials said the 2007-2008 budget is $50 million short, and cuts will have to be made. They blamed the deficit on rising fuel costs. But I did some work with the budget, and the sales tax numbers are not encouraging:

The city forecast a 5.9 percent increase in sales tax receipts for 2007-08. That compares to an actual 4.1 percent increase between 2005-06 and 2007-08, and 3.4 percent between 2003-4 and 2004-05. Given the economy, the current budget’s forecast seems overly optimistic.

• Sales tax collections did increase 9.5 percent between 2004-05 and 2005-06, but this seems to be the exception over the past decade. The total actually declined between 2001 and 2004.

Sales tax receipts are up 2.7 percent for the first 4-plus months of the year, according to the state comptroller’s office, half the pace needed to make the budget projection.

Maybe I’ve parsed the numbers wrong. Maybe there’s a bump coming in the last seven months of the year that will make up the deficit. But if not, someone downtown needs to start worrying about this.



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