The sales tax represents an increasing source of revenue for the City. Over the last ten years, sales tax collections have increased 110 percent. During the same period, sales tax receipts have also increased as a percentage of the general fund. In other words, the sales tax has been paying for a greater share of the City's operating expenses. Although sales tax receipts have steadily increased over the last ten years, collections are volatile since they are directly related to the well-being of the local economy.
Unanticipated events can have significant impacts on the local economy.
For example, the impact of the recent micro-chip manufacturing slowdown on Austin's high technology sector may have significant effects on local area's economy and, as a result, projected sales tax revenue. Currently, all indications imply that the local economy has slowed, but remains healthy. As explained in the Economic Outlook, the national economy has been experiencing a slowdown. All major Texas cities have felt the effects of this slowdown in their respective sales tax revenue through slower rates of growth. Austin sales tax growth has slowed and continues to remain among the strongest in the State.