As budget planning looms, tax revenues looking up



Both the City of Liberty Hill and Williamson County ESD #4 have already begun putting pen to paper on fiscal year 2020 budget plans, and for both, increasing sales tax revenue numbers might make the process a little bit easier this time around.

City officials are not ready to say the increase in sales tax revenues will translate into more available funds this budget cycle, instead focusing on the proposed expenses first.

“What I’ve been doing as far as meetings these last few weeks is really understanding and getting the department heads’ wants, needs and must-haves,” said Mayor Rick Hall. “That way it’s a little bit quicker when we do get the final numbers so we can finalize the budget. As far as where we stand with sales tax and property values I really don’t have a good feel for all the numbers yet.”

While he said it is good to see the sales tax numbers up, it was too early to tell how that would impact the budget.

“The sales tax has come up and of course that’s obvious because we’ve had some new businesses come in since last year. But as far as the actual numbers and how that’s going to play in the budget, I really won’t know until later next week,” Hall said.

Recent sales tax allocations from the Texas Comptroller show Liberty Hill continuing to eclipse monthly totals from 2018. Year to date, the City has received $828,232 in sales tax revenues through seven months, averaging just over $118,000 per month. Year to date, Liberty Hill is nearly $170,000 ahead of the same period last year.

That is $13,000 per month higher than the 2018 average and the last month Liberty Hill did not receive more than $100,000 in sales tax revenues was July of last year. Liberty Hill has surpassed $124,000 in each of the last three months.

A quarter cent of Liberty Hill’s 1.75 cent sales tax total is earmarked for the road maintenance fund and a half cent is allocated to the Economic Development Corporation.

As she begins preparing budget numbers to determine what funds are available for the upcoming budget, Liberty Hill Finance Director Becky Wilkins compares the three-year monthly average of sales tax allocations to a projected 12-month average of the current year and bases her projection for the coming fiscal year on the lower of those two numbers to estimate sales tax revenues for next year.

“That way I can see this year what we’re looking at, then a three-year average to see if those are close or far off,” she said. “I’m not a risk-taker so I will typically go for the safest approach.”

Projections can also be boosted by recently opened new businesses or those set to open soon.

“We have Quik Trip that’s going to be opening and so I had to consider some portion of the potential sales tax from that location,” she said.

The current fiscal year budget for the City’s general fund is $3.2 million. Tax revenues covered $1.49 million of the budget, divided between ad valorem – $806,805 – and sales tax revenues of $669,500.

Certified values for property taxes will not be provided by the County until July 25, but the early projection is that Liberty Hill’s taxable values have risen $43 million to $294 million.

For the ESD, sales tax revenues have grown rapidly since 2016 when those taxes were first collected. The monthly average in 2017 was just over $39,000, which has increased to $60,473 through seven months this year. Revenues rose 35 percent from 2017 to 2018 and are on pace to go up another 14.5 percent this year.

The total budget for the ESD – funded through property and sales tax – in the current fiscal year was just under $3.9 million, with an ad valorem tax rate of 0.98250 per $100 valuation. The budget was projected on $570,000 in sales tax revenues.