On Friday, Texas Comptroller Susan Combs sent $265.7 million in sales tax allocations to Texas cities, down 3.6 percent compared to April 2009 allocations. Calendar year to date, city sales tax allocations are running 7 percent lower than last year.

The City of Llano is slightly lagging statewide trends. Llano received $49,505 in April sales tax allocations, down 6.36 percent over April 2009. Llano’s sales tax allocations are down 7.74 percent year to date.

Sales tax revenues are not a major source of funding for most local cities’ budgets. Llano City Manager Finley deGraffenried said sales tax revenues represent approximately six percent of the city’s revenue budget. “Although the city budgets very conservatively, we will be off projection this budget year due to the continued decline in sales tax revenues,” deGraffenried explained. The decrease in sales tax revenue will not require any adjustments in operations this year according to deGraffenried, but the city will look at sales tax revenues “very cautiously” during its budget planning for next fiscal year.

Only two Hill Country cities are ahead year to date on last year’s sales tax allocations. Mason is up 2.94 percent on the year, despite posting a slight decrease of 0.29 percent in April allocations. Horseshoe Bay’s 85.4 percent increase year to date is an anomaly based on a one time audit windfall and three substantial “prior period collections” hitting the books in the past four months.

April 2010 sales tax allocations were up over last April for Horseshoe Bay (+69.73), Johnson City (+27.84%), and Cottonwood Shores (+23.26%). Monthly sales tax allocations fell for Burnet (-32.08%), Sunrise Beach (-18.85%), Blanco (-14.04%), Marble Falls (-9.57%), and Fredericksburg (-8.23%).

April sales tax allocations represent tax receipts for sales made during February, plus any prior period receipts accounted for during the period, less fees and retainage.

Sales tax revenues account for about half of the state’s $81 billion general fund. Although the state has brought in 12 percent less in sales tax revenue compared to last year, a spokes person for the Comptroller said there are no plans to revise the state’s revenue estimates that form the basis for the state budget.

Comptroller Combs said, “For the second month in a row, the decline in sales tax collections continued to moderate. Following an eight-month stretch of double-digit declines, the pace of revenue losses is slowing. The oil and gas, construction, manufacturing, and retail industries registered lower sales tax revenue collections than one year earlier. We expect further declines in the near term followed by a return to sales tax revenue growth later this year.”