The latest numbers shows the sales tax growth in Sioux Falls is at 2.5 percent. The city budgeted for 4 percent growth. Director of Finance Tracy Turbak says if this rate keeps up, it will leave the city in a $1.2 million hole. Now the city is looking at ways to make up the deficit.
The sales tax numbers are not living up to expectations, and it's caught the attention of the Sioux Falls City Council.
"I think we were probably a little strong to estimate four percent growth over last year so we're going to have to make some adjustments to make the budget work before the end of the year, but we still have to concentrate on providing the best services for the citizens of Sioux Falls," Council Member Pat Starr said.
Starr says the city has to continue to be strong with things like street repair, emergency services, and water.
Director of Finance Tracy Turbak says if the numbers don't rebound, it's going to be up to all city departments to find ways to save money.
"It's coming from a lot of different places and every department has really been tasked with identifying where they can find savings so it's really not in any particular place," Turbak said.
Turbak says the City started planning for the dip in sales a year ago, and they are prepared so they won't have to dip into reserves to make up the difference.
"We've got plans to respond if the trend continues to get worse, if sales tax revenue fall off, if the growth rate continues to slow or even falls to zero. We've got contingency plans that we're working on to be able to respond to that in effective ways," Turbak says.
Starr says no matter what the plan is, he hopes the council and administration can work together to find a solution.
"At this point, it's something we have to look at cautiously, but we're not ready to start slashing budgets yet," Starr said.
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For months, KELOLAND News has been reporting on the statewide sales tax shortfalls. In Sioux Falls, the latest numbers show revenues below the city estimate.