Sedalia reports $175,000 sales-tax shortfall year to date; marijuana tax adds modest revenue

The Sedalia City Council heard July 21 from finance staff on city revenue trends, including a reported fiscal year-to-date net sales tax decline of about $175,000, or 2.7%, through May. The presentation matters because sales tax is a major local revenue source and the shortfall contributes to a budget variance the city estimates at roughly $435,000 against an assumed 4% growth rate. Chairwoman Boggess introduced the presentation and Ms. Jessica, a finance presenter, delivered the figures. “Weare reporting through May sales. The net sales and use fiscal year to date is down about $175,000 or 2.7%,” Jessica said. She told the council the city had budgeted a 4% increase and that some of the variance stems from an unusually high May in the prior year and several retailers reporting lower sales or failing to report for the month. “Typically, the next month they catch up,” Jessica said about late filers. Jessica said the city is seeing a small year-to-date increase from the marijuana tax that began ringing at registers in October 2023: “This is the first full year comparison for fiscal year to date, and itis higher fiscal year to date of around $12,000 just for the additional marijuana tax.” She also reported that franchise tax receipts were lower (largely driven by electric taxes) and that transportation-related revenues were higher on the strength of gasoline tax (up about 10.1%), vehicle sales (up about 14.6%) and vehicle fees (up about 2.9%). Property tax collections were comparable to the prior year, Jessica said, with the bulk of those payments arriving in December and January. Council members asked about whether longer retail hours for marijuana sales would boost revenue; Jessica said the change had been enacted within the last month and would not yet appear in May sales and that the effect should be watched over coming months. No formal action was taken; the figures were presented for council information. The council did not supply additional budget directions during the presentation; staff said they would continue to monitor collections and report back. The finance committee presentation accounted for several minutes of discussion and closed without a motion to change budget assumptions.