As Sugar Land City Council prepares to adopt its fiscal year 2018-19 budget and property tax rate, a top focus is on remaining resilient as overall sales tax revenue unpredictably fluctuates.

Last year, a decline in sales tax revenue paired with a downturn in the regional economy—due in part to Hurricane Harvey—meant the city needed to identify $1.66 million in recurring budget reductions.

“We’ve really gotten back to the basics of the budget,” Budget Officer Justin Alderete said during an Aug. 2 budget workshop meeting.

Some recurring reductions in the FY 2017-18 budget included staff-related, city service and event cuts.

In the FY 2017-18 budget, $48.42 million in sales tax revenue accounted for 40.4 percent of general fund revenue for the city. The FY 2018-19 budget projects 41 percent of general fund revenue will come from $49.51 million in sales tax revenue.

“Our total revenues in the general fund are made up of a bunch of different categories, but what you’ll notice is there’s two primary categories of revenue—sales tax and property tax,” Alderete said. “Property tax is the only piece of the revenue that City Council has any control over. Sales tax is our biggest piece, but it’s the most volatile, and we have the least control over it.”

From October 2016 to June 2018, Sugar Land has seen several ups and downs in year-over-year change in sales tax revenue. April 2017 saw a low of about negative 22 percent year-over-year change, and in April 2018, a high of about 25 percent year-over-year change was recorded, according to a budget presentation during a July council meeting.

“For decades, the city of Sugar Land has successfully pursued a strategy of promoting growth in sales tax in order to lower the property tax for our residents,” City Manager Allen Bogard said. “This effort has been very successful and allowed us to maintain one of the lowest property taxes in the state. With this success has come an added challenge in managing the city’s finances. Sales tax is sometimes a volatile revenue stream that looks a whole lot like a roller coaster.”

Of Sugar Land’s estimated $245.42 million FY 2018-19 budget, the general fund accounts for 36 percent, according to budget documents.

Council proposed a rate of $0.32762 per $100 valuation, a 1-cent increase, during an Aug. 9 budget workshop. This would result in a $37.96 increase to an average homeowner’s annual tax bill, based on the average home value of $379,530.

A public hearing on the proposed tax rate will be held at 6 p.m. Sept. 4 at City Hall, 2700 Town Center Blvd., Sugar Land. During the Sept. 18 City Council meeting, council will vote on whether to adopt the tax rate and FY19 budget.