City Manager warns of sales-tax shortfall, announces hiring freeze for nonpublic-safety positions

City Manager James Atkinson told the Lubbock City Council on April 22 that the city is $1,800,000 behind year-to-date in sales-tax receipts and projects a $4,800,000 shortfall by fiscal year-end if current trends hold.

Atkinson said the city budgeted $42,000,000 in sales-tax receipts to date and has received $40,000,000.2. “So where we sit today, we are $1,800,000 behind in our sales tax collection,” he said. He added that sales-tax receipts are reported in arrears and the latest figures reflect spending from February.

Atkinson told the council he will implement a hiring freeze for open positions that are not public-safety roles, noting, “I am going to institute a hiring freeze on open positions that are not public safety and predominantly that's police, fire and animal control.” He said the freeze would save roughly $1,630,000 over the remainder of the fiscal year; the average annual cost per position was presented as about $63,000, with additional health-insurance savings expected. He also said a previously budgeted $250,000 expense for a special election will not be needed this fiscal year and those dollars will remain reserved until year end.

Atkinson showed the council an internal sales-tax model and a chart comparing Lubbock’s year-to-date performance with other Texas cities. He noted volatility across the state’s reported collections — large month-to-month swings in some cities — and said the state comptroller reported March receipts down 2.75% year-over-year. He emphasized that other revenue categories are meeting or exceeding expectations: “Almost universally, the other budgeted revenues for the city are over. They're better than projected by about 2 and a half million dollars,” he said.

Several council members asked follow-up questions. Mayor Pro Tem and others pressed whether the shortfall might be an anomaly that will correct; Atkinson said staff is contacting the state comptroller and using a third-party service to drill into local sales-tax detail. Councilmember Collins and others urged caution about taking measures that would reduce services or harm employees. Mayor Pro Tem and another councilmember thanked staff for preparing a plan and urged continued monitoring and contingency planning if March and April receipts remain weak.

Atkinson said staff will continue monthly reporting and will return to council if projections materially change. He framed the hiring freeze and identified expense offsets as intended to protect core services while matching spending to receipts.

Ending: Council did not take a formal vote on citywide budget actions during the work session; Atkinson characterized the hiring freeze as an administrative step staff will implement and said further adjustments will be considered if revenues worsen or improve.