The $10.92 million FY 2021-22 general fund budget adopted by council Sept. 14 expects sales tax revenue to total $8.81 million, a 31% increase from what council adopted in its budget roughly a year ago.
The optimism seems warranted, said Bee Cave City Manager Clint Garza, given general fund sales tax receipts of $7.70 million exceeds the FY 2020-21 annual target by 14%. That receipt total does not include the final two months of the fiscal year.
In some ways, the COVID-19 pandemic may have contributed to Bee Cave’s sales tax performance, Garza said.
“I think that last summer folks didn’t travel as much. So, for example, the home improvement stores saw a huge uptick as people stayed home and were improving their homes,” he said. “I’m really excited that people decided to support the local community by shopping locally.”
In total, Bee Cave city staff estimates that it will collect as much as $11.75 million in sales taxes in FY 2021-22. Beyond the general fund, which pays for Bee Cave salaries, maintenance and operations, the city uses a percentage of its sales tax receipts to pay for road maintenance and help fund economic development initiatives. The city will use $2.2 million of its sales tax collections for the Economic Development Corporation, according to city documents.
Other major sources of revenue for the city include building and franchise fees as well as a property tax rate of $0.02 per $100 valuation. The tax rate remains the same as the previous year, but as property values increase, homeowners will see their city tax bill rise. In FY 2020-21, the city collected $492,197 in property taxes.
The Texas Central Appraisal District has set values in Bee Cave at $2.6 billion, which includes a $181 million increase from 2020 values. Of that increase, $64 million is new property.
Of its general fund expenditures, the largest is on salaries and benefits for city staff, which will total $4.90 million in the coming fiscal year—about a 4% increase from FY 2020-21. Garza said the increase includes both merit raises and funding for three new staff positions. Two of these are for the Bee Cave police department, and the third is for the city’s parks department, according to city staff.
The city of Bee Cave also has allocated $50,000 for FY 2021-22 to The Bee Cave Arts Foundation. Those funds are generated from hotel occupancy taxes, which the city expects to generate a total of $400,000 in the coming fiscal year.