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Flagstaff budget retreat: staff warn of near-term revenue softening, propose higher recession-trigger threshold
Summary
City finance staff told council sales-tax and tourism-linked revenues have softened and outlined state-shared impacts from the San Tan Valley annexation and federal tax changes; staff proposed raising the first recession-plan trigger to avoid premature cuts.
City finance staff on Friday briefed the Flagstaff City Council on revenue trends that have softened early in the fiscal year and proposed cautious changes to the city’s recession plan.
The city’s revenue presenter said general-fund sales-tax receipts ended FY24–25 roughly $225,000 above adopted estimates, but early FY25–26 data show weakness in hotel and short-term-rental receipts and lower use-tax collections — categories that historically drive volatility. “We ended about $225,000 above our estimates for sales tax,” the presenter said, and later flagged a current-year projection shortfall across major categories of roughly $921,000, or about 1.2% of the city’s budgeted revenues.
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