Lubbock projects $1.8 million sales-tax shortfall; city manager orders hiring freeze for non‑public‑safety roles

City Manager Atkinson told the Lubbock City Council on April 22, 2024, that year‑to‑date sales‑tax collections are $1,800,000 below the budgeted amount and that, if current trends persist, the city could finish the fiscal year about $4,800,000 short against a budget of roughly $105.6 million.

Atkinson said the city’s internal sales‑tax model — which accounts for historical monthly weightings and reports collections in arrears — shows actual receipts of about $40.2 million against a budgeted $42.0 million through the reporting period. “We have received 40,000,000.2. So where we sit today, we are $1,800,000 behind in our sales tax collection,” Atkinson said.

The shortfall prompted Atkinson to announce an immediate hiring freeze for open full‑time positions outside public‑safety departments. He estimated the seven remaining months of the freeze would save about $1,630,000 in payroll (roughly $63,000 per position on an annualized basis) and additional health‑insurance savings. Atkinson also noted a $250,000 election expense in the city secretary’s budget that will not be spent this fiscal year and said other non‑sales‑tax revenues are running above projections by about $2.5 million, which together further offset the gap if trends hold.

Why it matters: Sales tax is the city’s largest general‑fund revenue source. Atkinson told council members that the sales‑tax forecast is the primary driver of near‑term budgeting decisions: “sales tax is the barometer of your economy,” he said, adding that it “moves fast in both directions.” He said property‑tax receipts remain stable and are not driving the variance.

What triggered the report: Atkinson showed a chart comparing year‑over‑year monthly collections across peer Texas cities and noted a sharp December spike followed by a steep January–February drop that is unusually volatile. He said statewide Comptroller data showed March sales‑tax receipts down 2.75% year over year and that some categories the Comptroller flagged as soft (motor fuel and oil production/severance receipts, hotel occupancy and tobacco taxes) do not directly affect Lubbock’s city sales‑tax take. Atkinson said the city is drilling into its local sales‑tax detail with a third‑party service and coordinating with other municipalities and the Comptroller’s Office to understand the anomaly.

Council reaction and caveats: Councilmembers thanked staff for early action and for proposing expense reductions rather than seeking new revenue. Councilmember Glasini (identified in the meeting transcript as Mr. Glasini) praised staff: “I want to...say thank you to our city staff for presenting a plan to keep spending in line with revenue and monitoring these trends.” Several councilmembers asked whether the freeze would affect services; Atkinson clarified the freeze applies only to full‑time non‑public‑safety positions and that part‑time and seasonal hiring will continue where needed for operations.

Next steps: Atkinson said staff will continue monitoring monthly reports (sales‑tax data arrive with a lag) and will return to council if projections change materially. He said if the city’s other revenues remain above projection, the combination of those gains plus the hiring freeze and unspent election funds would cover the current $1.8 million shortfall and could cover the $4.8 million downside scenario, but additional cuts would be considered if collections weaken further.

Ending: Council did not take formal budget action at the meeting; the discussion was a work‑session briefing and staff will present further updates as monthly receipts are posted.