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Montgomery City projects $2.8M revenue surplus as tax streams show mixed trends
Summary
At a Montgomery City Council meeting the mayor reported that overall revenue is about $2.8 million over budget as of February 2025, citing near-breakeven sales and use tax, a sharp February drop in lodging and gasoline taxes, and an expected $2.75–3.0 million boost to reserves by fiscal year-end.
Mayor (name not specified) reported a mixed financial picture for Montgomery City during a council meeting, saying overall revenue was about $2,800,000 over budget as of February 2025 while some tax sources weakened.
The mayor said sales and use tax revenue is “trending near breakeven,” with the growth rate for the month of February about 0.5% compared with the same month in the previous fiscal year and year‑over‑year collections “a little bit more than 1%.” He listed household spending pressures and rising goods prices as factors holding back revenue.
Lodging tax revenue declined significantly in February, the mayor said; by comparison he stated the same period in FY2024 showed nearly a 10% negative rate, while year‑over‑year growth was nearly 5% positive. Gasoline tax receipts “took a nosedive in February” after strong January growth, but the mayor said recent legislation passed by the city council to increase the gas tax will generate additional revenue that should help that source recover. Alcoholic beverage tax receipts were reported to have grown more than 3% for the month and about 9% year over year compared with FY2024.
The mayor said more than 95% of ad valorem (real property) taxes had been collected compared with budget as of February. Business license revenue was lagging in the general ledger because the city extended the renewal period; roughly half of the expected business license receipts had been posted to the ledger in February, he said, and the office was still finalizing calculations.
Those factors, together with projected increases in ad valorem, sales, lodging and rental taxes and new receipts from a tourism improvement district (TID), produced the city’s projected $2.8 million revenue surplus as of February. The mayor projected the city would add a minimum of $2.75 million to $3.0 million to reserves by the end of the fiscal year, a position he said is viewed favorably by bond rating agencies including Moody’s, Standard & Poor’s and Fitch.
The mayor thanked cabinet heads and department directors for “prudent spending,” and said lower-than-budgeted personnel spending — driven in part by unfilled vacancies — contributed to expected underspending on operations. He said the council would discuss additional bond‑rating and reserve details at a future meeting or work session.
No formal votes or ordinance actions were recorded in the transcript excerpt of this report; the mayor’s remarks were presented as an informational financial update.
