The city could finish 2019 with about $400,000 less sales tax revenue than initially projected, a trend that might be linked to construction along a busy business corridor along Interstate 45, city administrators said.
Sales tax revenues collected in May for March sales are about $157,500 less than the budgeted amount for the month, said Angie Steelman, director of budget and project management for the city.
“It’s worth noting that March was the first month that the I-45 bridge was closed,” Steelman said.
Businesses along Interstate 45 for months have said they’re concerned about sales now that crews from the Texas Department of Transportation have shut down the FM 646 overpass spanning Interstate 45, the first step in expanding the highway in that area. But Tuesday’s council report is the first real data to back up those claims.
The council in August 2018 approved a $207.9 million budget for 2019 that included sales tax revenue projections of about $20.15 million. But, based on new projections, the city might now end 2019 with $19.75 million in sales tax funding.
Crews on March 1 took down the overpass at FM 646, leading to long lines of cars during rush hour and discouraging many would-be shoppers. The work there is part of a $120 million effort to expand the interstate.
Officials already have made significant progress on the FM 646 project and the hope is that the road will reopen in the late summer or early fall, said Danny Perez, spokesman for the Texas Department of Transportation.
Crews already have completed the northbound Interstate 45 overpass at FM 646 and nearly completed the concrete pavement placement for FM 646 along with the frontage road east of the interstate, Perez said. Crews over the next several months will switch the southbound traffic onto a new overpass and then finish paving for FM 646 on the west side of the interstate.
The reopening of FM 646 will help improve traffic even as work along the interstate continues, Perez said.
League City isn’t the only city along Interstate 45 to cite issues related to declining sales tax revenues. Officials with the city of Webster this month cited declining retail sales leading to less sales tax revenue as a reason they couldn’t move ahead with a plan to turn the front of a historic school building into a visitors center or museum.
Despite the lowered sales tax projections, Steelman painted a mostly positive picture of League City’s economic outlook through the rest of 2019.
The city so far has collected about $75.98 million operating revenues, or 60 percent, of the amended budget’s $126.14 million projection, while only spending about $57.96 million, or 51 percent of the year’s $114.91 million projection, records show.