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Hoover finance update: sales and use taxes flatten; property tax rises continue
Summary
City finance staff told the Hoover City Council that sales and use tax growth slowed from 2023 to 2024, online sales tax (SSUT) comprises a growing share, and real property tax collections rose notably year over year; staff cautioned revenues are heavily concentrated in sales tax and early-year timing affects percentages.
Wendy Cornett provided the Hoover City Council with a financial update on Feb. 17 that showed slower growth in sales and use tax collections for 2024 and an ongoing shift to online sales tax receipts.
Cornett said sales and use tax and the state-collected share for online sales (SSUT) together provide roughly 65–70% of the city's revenue historically and described 2024 growth in sales and use tax as "less than 1%" compared with the prior year. "From 2023 to 2024, it was less than 1%, so 0.26%," she said.
The nut graf: The city's revenue profile remains concentrated in consumer-driven sales taxes; staff reported modest year-over-year growth in property tax and licenses and permits but cautioned that January receipts are seasonally heavy for property tax and permit renewals, which can skew early-year percentages.
Key figures Cornett presented: sales and use tax growth of about 3.3% from 2022 to 2023 and 0.26% from 2023 to 2024; real property tax increases of about 7% from 2022 to 2023 and nearly 11% from 2023 to 2024; licenses and permits saw an estimated 14% increase from 2022 to 2023 and 2.6% from 2023 to 2024. For early 2025 activity, Cornett said sales tax and SSUT combined accounted for 57% of interim receipts but noted this is influenced by the timing of property tax and license collections in December–January.
Council members asked questions about a zero allocation for SSUT in January 2023; Cornett said the city received a zero allocation from the state for that month and that the city lacks direct ability to trace or alter state distributions. She said, "We aren't in the driver's seat as far as being able to fact check what we get from the state," and described the state's method as a "black box."
A council member asked whether lodging tax is part of sales tax; Cornett replied lodging tax is separate and estimated annual lodging-tax receipts at about $2,324,000.
Ending: Cornett and councilors described current forecasts as expecting a leveling of sales-tax receipts across the state. She emphasized the city's dependence on consumer spending patterns and noted the city watches January–February collections closely because of seasonal timing.
