Tag: sales tax

Sales Tax Receipts UP 11% For July – Making Me Look Like An Idiot.

Pardon me while I wipe this egg off my face and eat some humble pie.

After seeing sales taxes plunge about 8% last month, I wondered out loud if the top was in. If the never-ending money train was about to come to a screeching halt. The U.S. is officially in recession, after all.

Nope. UP 11% for July.

So where was the error in my thinking?

Also, the latest CPI number was UP about 8.5% YoY and we know that number is pretty much bullshit as the reality is much higher. If you use the CPI formula from the 1980s, inflation is more like 12% to 15%. So to see our sales tax receipts UP 11% YoY is pretty much in line with that.

So I guess the REAL question is how the hell sales tax numbers for JUNE actually DROPPED 8%?? That is a huge move and clearly a big outlier now. I need to go back and see the actual numbers from last year. Was last June a huge outlier to the upside or was this June way down for some reason?

Although I am eating crow right now, I stand by my assertion that Spring Ho had nothing to do with the most recent sales tax increase – because we also had Spring Ho last year, and I highly doubt that approximately $330,000 more (8% of $330k = the $26,000 increase between last July and this July) dollars were spent this Spring Ho versus last year. It is purely due to inflation – especially in the gasoline area – which is UP 20% over last July.

Only thing to do now is try and find details on the 8% drop in June 2022 and see what caused it. I have no clue what it could be.

**UPDATE #2 – 9/9/22 **

Looking at last June’s $252,670, it looks high compared to the months around it. Why was June about $20k high last year? Hell if I know. All seasonal effects should be accounted for as these are always YoY comparisons. Maybe everyone bought a shit ton of repair hardware after the Freeze of the Century last year? Simultaneously, this June’s numbers look kinda low by about $10,000 compared to surrounding months. Economic slowdown?

So it looks like a bit of both: slightly higher than normal last year and slightly lower this year. But July of THIS year rebounded strong in a MoM comparison while July of 2021 saw a big DROP MoM compared to June 2021.

So what I did was combine months into two-month blocks to smooth things out a bit to see if there are any clues as to where receipts may be heading. Here are the results:

May/June 2021 versus May/June 2022 – the increase is only 1.3% YoY ($465k versus $471k)

June/July 2021 versus June/July 2022 – the increase is only 1.5% YoY ($490k versus $497k)

July/Aug 2021 versus July/Aug 2022 – the increase is 11.5% (461k versus $513k) – receipts have picked back up. Increase for Texas as a whole was 13% YoY for August.

Contrast that to earlier in the year:

I compared March/April 2021 with March/April 2022 and the increase was significant: $403,000 versus $444,000 or a TEN PERCENT increase YoY – which is more in line with “official” inflation.

Then I moved to the April/May combined month comparisons. We see it slow a bit to 8% YoY ($459k versus $496k).

So as we move down the calendar from March/April and compare two-month blocks of receipts, we see: up 10%, up 8%, up 1.3%, up 1.5% and up 11.5%

Slowdown has disappeared – back to double digit increases.

Did the City and the LEDC Just Top-Tick Sales Tax Receipts?

Well, it finally happened…

Sales tax receipts DECREASED for the first time in 3 years.

Maybe trees DON’T grow to the sky. Maybe we are finally going to see that much-needed recession to clear out the dead wood and garbage (* cough ** Carvana * cough **), maybe sales tax receipts start falling and the City’s money tree starts losing a lot of leaves.

Amazingly, the LEDC AND the City may have almost perfectly nailed the top in sales tax receipt by borrowing heavily against that “sure thing” money they assumed would grow forever.

You’ll recall, the LEDC borrowed $1.5 million for its ill-fated Business Pork project AND they begged for and received another $971,000 from the City coffers – both very recently.

The City also borrowed $6.5 million at 3.26% for some very dubious projects only two months ago.

As I wrote two months ago:

Don’t worry though, according to TJ Monroe, “typically, we are able to pay those down within the nine years and have saved a substantial amount of money”.

Hm. Perhaps.

Or perhaps with the Fed finally raising rates back to normal, thus cratering the stock market and the housing market and causing a deep (and much-needed) recession, the City won’t have the ridiculous always-increasing sales tax and other tax revenue to rely on and find themselves screwed by the debt burden.

All those stimmy checks and fraudulently obtained PPP loans are long gone and now the addict is being weaned off the monetary heroin. It won’t be pretty. The market is already down 20%, shit coins are being revealed for the Ponzi scheme they are, and businesses are starting to see slowdowns.

A recession probably isn’t the best time for new businesses to start or old businesses to expand into the new ‘Business Pork’ either. The LEDC may very well see a double whammy of declining revenue and zero businesses having any interest in the Business Pork.

Ouch.

Dispatch Runs LEDC Puff Piece – Part II

We covered a few Lampasas growth basics in Part I. Now let’s dive into the article a bit.

According to The Dispatch: “Mandy Love Walsh…said in an email that sales tax is one sign of economic growth. The City is at a 21% year-to-date increase in sales tax“

I hope this isn’t the number that Mandy and the LEDC hang their hats on as “proof” they are an indispensable group of geniuses we should thank for all new businesses in town. You know what else makes sales tax collections shoot up? Inflation.

If the cost of everything goes up 10% in a year, you are going to collect 10% more sales tax, ceteris paribus. If you sold a million gallons of gas in both years but the price doubled – well, your sales taxes are going to increase quite a bit. This has nothing to do with “growth”.

Many other cities around us are ALSO seeing huge double-digit sales-tax receipt increases (Goldthwaite, San Saba, etc) – and Mandy Walsh doesn’t work in any of those towns. Gee – how did they manage it??

The increase could further be explained by having a moron in the White House printing money out of thin air and handing it out to everyone – which is what we have seen over the last year or more. This is also not “growth” and the bill will come due eventually – as is already happening with supply chain issues, labor shortages and more inflation.

Ergo, the fact that sales tax receipts are up 21% over last year does NOT prove that we grew 21% and it certainly doesn’t prove that any growth was due to the LEDC or Mandy Walsh. All it means is a lot of dummies are smartening up and moving from shitty lib states and big cities and infesting small rural towns – and that the cost of everything is skyrocketing.

The Federal Reserve has printed and the federal government has spent TRILLIONS in fiat currency over the last 18 months. It is an experiment in money printing that is unmatched in all of human history. It is an artificial sugar high and not true organic growth. Lampasas is just another boat being lifted by this tide. It has nothing to do with the LEDC or Mandy Walsh.

Part III coming soon…

But…But…But…Marble Falls Has One!!!

I have opined previously on how ridiculous it is to try and match Marble Falls when it comes to expenditures [such as Christmas decorations] and paying our government workers [like city managers].  Marble Falls may be close to us in population, but there is about FIVE TIMES as much money sloshing around there.  [I calculate this by noting that Lampasas sales tax revenue is around $120,000 to $150,000 per month whereas Marble Falls gets a check for more like $750,000 to $800,000 per month – that is a HUGE difference].

I think we all know this on a gut level.  After all, they have not only a Wal-Mart but also a Home Depot AND a Lowes!!  Their cup definitely runneth over.

But there is ONE thing we should have tried to copy Marble Falls on and didn’t – and that is their city council chambers.  As you see below, it is quite modest…about 30 chairs, a big TV on one wall and a medium sized room.

What did OUR city do when they got this “city council chambers vanity project” in their heads?  Sent Monica Wright out to view the city council chambers of Dallas, Austin and Round Rock to “look for ideas”.

Yes, I’m serious.  I have that on very good authority.

Dallas and Austin are two of the biggest cities in the entire country and Round Rock is about 20 times bigger than we are.  Yeah – makes total sense we would try and copy them – and spend several days driving around to ogle them!  Maybe that’s where they got the idea to throw away our puny and embarrassing $34,000 A/V system bid and instead blow almost $100,000 on the “Ferrari of A/V systems” in a chamber with SEVEN TV sets.

In your face Marble Falls!

One of Finley’s talking points to justify this huge expenditure is that city council “needed more room”…but I’m wondering why?  When I read every single council minutes for the last 4.5 years, there were rarely more than 20 city employees mentioned as being present.  Call it 25, tops….and THAT was rare.  Usually it’s more like 12 or 15.

So the “twice the size” new chambers and the “100 stackable chairs for $12,800” must be for all those concerned citizens who show up at the meetings every week, right?

Not exactly.

When a certain city council member was yelling at me that “all you do is bitch and moan like everyone else, but you never come to a meeting”

I then said “so not a lot of people come to the meetings, eh?  Like how many show up?  Three?  Five?”

He said…and I quote…”If we’re lucky”.  Having just walked him right into my trap, I asked “if nobody goes, then why do we need this fancy-pants, top-of-the-line, overkill A/V system with $8,600 worth of huge TVs costing almost $100,000.00?”

Bam.  No answer for that one.

If Marble Falls tried to match US and blow a ton of money on a brand new city hall and council chambers, they would have to spend almost $8 million dollars and have 30 TV sets for it to be proportionately ridiculous.  I’m pretty sure the citizens of Marble Falls would grab their pitchforks and torches and toss a few morons off that big bridge of theirs if they pissed away that kind of dough.  And rightfully so.