Hoover reports modest revenue gains for five months; lodging taxes lag, MSA designation draws attention

Hoover — City finance staff told the Hoover City Council on March 3 that overall revenues through the first five months of the fiscal year are tracking ahead of budget, but lodging-tax receipts are lagging prior years.

The presenter said combined regular sales-and-use-tax and the state-administered remote-sales-use tax (SSUT) are up about 3.7% for the five-month period compared with the prior year; SSUT alone rose about 12.5% for the same span. Real-property tax collections are at roughly 95% of budget for the year. The presenter said one category — lodging taxes — is “riding a little bit lower” than the roughly 41% of year elapsed.

Why it matters: sales and property taxes make up the bulk of Hoover’s general-revenue receipts and drive budget planning for services and capital work. A drop in lodging tax can reduce funding for tourism-related programs and complicate short-term revenue forecasts.

Details from the briefing: the presenter said February produced a strong month for regular sales tax (about $8.5 million versus roughly $7.8 million the prior February) and a double-digit February gain for the SSUT category; combined, the two sales categories showed mid-single-digit gains year to date. License-and-permit fees were reported up about 7.5% for the most recent February compared with the prior year. Gross-receipts and franchise taxes were described as "bumped up" for the year and are among the categories where the city has collected most of its expected receipts already.

A council member asked specifically about the lodging-tax decline and requested a breakdown separating the city’s lodging tax receipts from associated bed fees; the presenter said staff will analyze that and report back. Another council member asked for future monthly reports to include year-to-date expenditures as well as revenues; the presenter said staff expects to resume combined revenue-and-expenditure monthly reporting within about a month.

Separately, a councilor said a news article had reported a change in the Metropolitan Statistical Area (MSA) designation that no longer lists Hoover as a principal city. That councilor said she had contacted the offices of U.S. Sen. (names provided to council in the meeting) and the city attorney to seek remedies, and noted she had asked staff to look into whether Hoover’s location across two counties affects the statistics. Council members discussed that the MSA designation is set by the U.S. Office of Management and Budget and that staff would research the change.

What’s next: staff said a revenue auditor position approved in the prior budget has started, and that the auditor will help identify businesses operating without current licenses and improve revenue compliance. The council asked staff to return with lodging-tax detail and the next monthly update that includes expenditures.

Ending: councilors thanked staff for restoring monthly financial reporting and said they would watch trends as the fiscal year progresses.