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Montgomery mayor reports modest tax growth, projects nearly $2.8 million revenue surplus and larger reserves
Summary
City fiscal officials told the Montgomery City Council that year‑over‑year sales and use tax growth is modest, lodging and gasoline taxes are volatile, and overall revenues are projecting about $2.8 million over budget through February 2025, with reserves expected to grow by roughly $2.75–$3.0 million.
Mayor and finance staff told the Montgomery City Council on the evening meeting that sales and use tax collections are roughly even with the previous fiscal year and that year‑over‑year growth is about 1 percent.
The mayor said several factors are weighing on sales revenue, including pressure on household budgets and rising prices. Lodging tax collections were described as down in February though year‑over‑year comparisons showed some positive growth; gasoline tax receipts fell in February after strong January receipts. The mayor noted that recent council legislation to increase the gas tax should help that revenue source recover.
City staff reported that more than 95 percent of ad valorem (property) taxes have been collected against budget as of February, while business license revenues were still being posted because the city had extended the renewal period. Staff said the delay in posting business license revenue explained most of a shortfall in total collections compared with the same point in 2024.
City revenue projections presented at the meeting show about $2,800,000 over the February 2025 budget projection, a result the mayor attributed to stronger ad valorem, sales and use, lodging and rental taxes, and receipts tied to the city’s tourism improvement district (TID). City officials also told council members that total departmental and non‑departmental operations are expected to come in under budget, and that unfilled positions and targeted cost controls will likely leave actual expenditures below budget.
As a result, the mayor said the city expects to add “a minimum of $2.75 to $3,000,000” to reserves by the end of the fiscal year — a buffer the administration said supports the city’s standing with bond rating agencies such as Moody’s, Standard & Poor’s and Fitch.
The mayor also reviewed upcoming events tied to the city’s commemoration of the 60th anniversary of the Selma to Montgomery march, including a family day at Carver High School, a “Stars to Freedom” rally and the formal re‑enactment of the march and rally at the State Capitol featuring Reverend Dr. Bernice King.
City officials did not present an amended balanced budget for formal adoption at the meeting; they asked the council to note the revenue and reserve projections and said further budget discussion would continue in subsequent council work sessions.
