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Montgomery reports slow sales-tax growth; lodging, gas and alcohol taxes rise
Summary
Mayor reported modest sales-and-use tax growth and stronger lodging, gasoline and alcohol-tax receipts, and reminded businesses that the city extended the business license deadline to Feb. 21 with accounts required to be current for renewal.
Mayor (not specified) told the Montgomery City Council that sales-and-use tax growth is "relatively flat, just showing about 1.36" and flagged that figure as a concern for city revenues.
The update, given during the council meeting's financial report, said sales-and-use tax accounts for roughly half of the city's general fund operating and debt-service budget and is being closely monitored by the chief financial officer. "We haven't seen the type of growth that we'd like to see," the mayor said.
The mayor placed the sales-tax softness in a national context: forecasters have flagged that consumer spending is slowing and that rising prices without wage gains can cause households to cut back. The mayor said FY2024 showed about 5% growth for sales-and-use tax, but that revenue this fiscal year is expected to grow more slowly than in prior years; the city budgeted accordingly.
Other revenue streams showed stronger performance in the mayor's presentation. Lodging-tax receipts were nearly 9% higher year over year and about 5% higher than December of the prior year, the mayor said, and the city expects lodging revenue to remain stable given projected tourism growth. Gasoline-tax revenue rose about 14% over January 2024 and nearly 5% year over year, a pattern the mayor attributed to increased travel around the city. Alcoholic-beverage tax receipts increased nearly 3% for the most recent period and about 11% year over year.
The mayor said the city will post a fiscal-year-end income statement after February collections are posted in March to show how revenues and expenditures are trending.
On business licensing, the mayor announced the renewal deadline was extended to Feb. 21 and warned that "all tax accounts must be current with the city of Montgomery and paid in full before renewals will be issued." He acknowledged complaints from local businesses about the renewal process and said the chief financial officer, chief of staff and CAO have been troubleshooting software and staffing changes that caused the problem. "This is an issue that will not happen again," he said, adding that the city is implementing changes based on lessons learned.
The mayor did not propose any immediate budget cuts or new revenue measures during the report and indicated monitoring and follow-up reporting will continue.
