Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Finance topic
No spam. Unsubscribe anytime.
Lexington staff reports sales tax lag and $163,000 property‑tax shortfall; overall surplus outlook reduced
Summary
City staff told the Lexington City Council that sales tax collections have trailed budget expectations and that property‑tax collections are about $163,000 below forecast; staff will investigate timing and causes.
City staff told the Lexington City Council that sales tax collections have trailed budget expectations during the fiscal year and that property‑tax collections are running below budget, creating a roughly $163,000 shortfall in property taxes the city is investigating.
A staff presenter said, "sales tax has been falling behind what's budgeted throughout the year" and added that "we missed our property tax collections by about a 163,000." The presenter said first‑half property tax collections had been "bang on" and that staff must analyze whether missed payments reflect timing, property sales or other factors.
Staff said the combination of lower‑than‑expected sales tax and the property‑tax shortfall reduces the city’s earlier projection of a $500,000 to $600,000 operating surplus but that the city still anticipates ending the year with a positive balance. "All that said, the balance of revenues ... we're still projecting an operating surplus," the presenter said, while cautioning the surplus will be smaller than projected in January.
Council members asked whether the recent City Hall move could have contributed to missed payments. A staff member responded, "It is possible. I have no reason to think that, but I couldn't rule it out," and said staff will research whether location changes affected in‑person payments or taxpayer awareness.
Staff also highlighted an increase in expenditures tied to Virginia public assistance programs and the Children’s Services Act, both of which the presenter described as entitlement programs outside the city’s direct control. The presenter said increases in these programs are an "early harbinger" of greater need in the community and will warrant monitoring.
On a positive note, staff reported that lodging and meals tax revenues are projected to exceed budget and that the city recently received a new street sweeper in May. The presenter cautioned that while some revenue lines have improved since January, the city will track monthly data and may need to tighten the budget if early indicators point to longer‑term declines.
No council vote followed the presentation. Staff were directed to continue analyzing the data on property‑tax and sales‑tax receipts, report findings, and monitor the impacts of state and federal program changes on the city budget.
