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Board clarifies 3% sales-tax projection is revenue growth, not a local tax increase
Summary
During review of the proposed FY2027 budget, staff said the 3% figure is a conservative projection of next year’s sales-tax receipts based on HDL Companies data; several members initially misheard it as a local tax-rate increase and were corrected.
During the budget presentation, staff told the board the revenue forecast includes a 3% sales-tax projection for the coming year but emphasized this is an estimate of receipts, not a local tax-rate increase.
“ We did a 3% increase in sales tax. That’s pretty conservative, but based on the sales tax revenues that we've received this year, it's in line with our regular collections,” the staff member said, explaining the projection comes from HDL Companies data. Several board members said they had misheard the discussion as a proposed tax-rate increase; the chair and staff clarified that the city’s sales-tax rate is unchanged and the 3% figure reflects projected additional receipts. The staff also walked through the distribution mechanics: state collects 6.25%; locally the city receives 2¢, of which 0.25¢ goes to CCPD, 0.25¢ goes to MEDC, 0.5¢ is set aside in lieu of property tax and the remaining cent is for city operations.
Board members responded that the 3% projection looked conservative and that the budget could be adjusted if actual receipts differ from the estimate.
