Collin Boothe, assistant city administrator and finance director, presented a monthly update to the council on Feb. 21 that showed the city’s property tax collection is back in the black but sales tax dipping. Jason Fochtman/Staff photographer
*Originally posted on the Houston Chronicle. Read original article here.
A drop in sales tax collections for Conroe has finance officials keeping an eye on the bottom line as city council members continue to slow spending.
Council has continued to wrestle with the city’s finances following the construction of the new Hyatt Regency Hotel and Convention Center. In September, council learned the hotel won’t see a profit for several years, forcing the city to borrow money from the Conroe Industrial Development Corp. to cover debt service for the hotel.
Collin Boothe, assistant city administrator and finance director, presented a monthly update to the council on Feb. 21 that showed the city’s property tax collection is back in the black but sales tax dipping.
“That’s a real red flag to us when we are monitoring these sales tax collections on a monthly basis,” Boothe said. “Whenever we see a negative like that it gives us pause. It is absolutely something we need to keep our eye on.”
According to information from Boothe, sales tax collections in January saw a 2.1 percent increase over January 2023 to $4.1 million from $4 million.
However, Boothe updated the council with February numbers showing a 3.35 percent drop in collections.
This February, this city collected $6.8 million in sales tax, a drop from $7.1 million collected in February 2023.
Boothe said collections compared to the same time last year are “flat.”
“Which is still bad,” Councilman Harry Hardman said. “This is a very challenging budget and if I remember right, sales tax is about 60 percent of our budget.”
On the positive side, the city’s property tax collections have increased, putting the city slightly ahead of budget. The city has collected $36.8 in property tax to date for the fiscal year, which is $740,784 more than what was budgeted, Booth said.
The city’s total 2024 budget for property tax is $42.5 million. The city collects most of its property tax in December and January, Boothe said.
“Even though this is a positive variance right now, it will end up being closer to what budget is,” Boothe said. “It just depends on the timing of tax collections.”