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Committee debates conservative sales‑tax forecasts; one member urges budgeting 'in arrears'
Summary
Staff described sales‑tax volatility and options for linking growth to CPI; a committee member proposed budgeting on last year’s actuals plus surpluses (in arrears) to reduce year‑to‑year swings. Members discussed risks and operational tradeoffs.
Presenter told the committee sales tax is the most volatile revenue source and described approaches for projection—flat, CPI‑linked, or conservative growth. “You’re looking year over year…that’s an appropriate way to do it,” he said, and noted sales tax can swing hundreds of thousands of dollars.
A committee member with council and committee experience urged trying an arrears model: budget the prior year’s actual sales tax as the baseline and roll surplus into the next year instead of forecasting anticipated growth. He explained this would provide stability and suggested testing a one‑ or two‑year arrears approach to smooth the revenue base. Other members warned that intentionally budgeting flat for a year could force program cuts and training delays; staff agreed to investigate whether an arrears policy would be feasible and what operational impacts it would have.
