Strong Local Economy
Status Indicators: Proceeding as Anticipated | Monitoring Progress | Reviewing for Improvement | Information Unavailable
Proceeding as Anticipated
Reviewing for Improvement
Please note that Q1, Q2, Q3, and Q4 refer to the first, second, third, and fourth quarters of the Fiscal Year. The City’s Fiscal Year runs from October 1st – September 30th and is denoted by FY.
To compensate for quarterly fluctuations in sales tax, the City's Budget Office created quarterly forecasts for sales tax collections per capita. Per the Budget Office's forecasts, sales tax collections in the 4th Quarter would be considered at target if per capita met or exceeded the annual target of >$599. Since the cumulative sales tax per capita is less than $599, the City did not meet its annual target. 4th Quarter sales tax collections totaled $11,989,115, or, $136.66 per capita based on an estimated population of 87,730 as noted in the FY17 Budget Book. At $136.66 per capita, this brings the year-to-date total for sales tax collections to $551.66 per capita. Current results show a 4.4% decline from the 4th Quarter of FY 2016 when sales tax per capita totaled $143 and the population was slightly smaller (87,504). A major contributing factor of this decline is the expiring sales tax incentive agreement, which allowed for a sharing of revenue with Medline in order to spur the local economic development in Sugar Land.
Sales tax is
one of the most important revenue streams for the City, but it is also highly
volatile and subject to risk. This is why the City values the importance of
fostering diverse revenue sources. As the City planned its budget for FY 2017,
it incorporated the declining receipts from an expiring sales tax incentive
agreement into its forecast. This expiring sales tax incentive agreement was
expected to negatively affect the amount of sales tax collected throughout FY
2017. However, the City was prepared and planned its budget around this event.
The City conservatively budgeted FY 2018 sales tax revenue flat based on FY
2017 projections. In other words, the FY 2017 year-end sales tax projections
set the baseline for our FY 2018 sales tax budget. However, the last 3 months
of FY 2017 came in lower than projected, leading the City Manager to
recommend reducing the FY 2018 sales tax budget even further after the FY
2018 budget was approved, based on current trends.
Please also note that in previous fiscal years, this measure had an annual target value of >$591 of sales tax collection per capita; however, the target is based on an improvement in sales tax collections per capita each fiscal year. Therefore, because sales tax collections per capita in FY 2016 totaled $599, the new target for FY 2017 is sales tax collections greater than $599.
The target and status for this measure reflects the sales tax collections per capita in the City of Sugar Land. Sales tax collections will be reported on a quarterly basis.
Sales tax is generated by goods sold or delivered by businesses within the City’s corporate limits. Of the 2% local share out of the 8.25% total sales tax, 0.25% is allocated to the Sugar Land Development Corporation (SLDC), 0.25% to the Sugar Land 4B Corporation (SL4B), and the remaining 1.5% is deposited in the City’s General Fund.
An increase in sales tax per capita each fiscal year. The target is >$599/capita (Year To Date). This target reflects an increase in the amount of taxable items purchased, and therefore, an increase in the economic vitality of the city. Sales tax collections will be reported on a quarterly basis.
Sales tax collections are a barometer of economic health, and help the City judge the economic climate going into the next budget year.