Decreased cannabis sales strain Farmersville general fund
The city council is prioritizing the needs of residents while the decreased cannabis sales negatively impact the general fund
FARMERSVILLE – A steep drop from the high mark of cannabis sales has put Farmersville’s upcoming budget in a bind. However the city has managed to put together a draft budget that is balanced with some hopes for additional development in the future.
On May 8, Farmersville City Council met to discuss their draft budget for 2023-24 beginning July 1. The biggest loss in the revenue side of the ledger came from a decrease in cannabis sales. In spite of the loss, the draft budget is balanced and the council is prioritizing necessary improvements in the city.
The biggest hit to Farmersville’s general fund came from measure Q (cannabis business tax) due to a decrease in cannabis sales. According to the Farmersville staff reports, revenue from measure Q declined for eight quarters in a row. Average loss is now 6% per quarter.
Although Council Member Greg Gomez remembered how cannabis sales from local dispensaries had increased the general fund in the last few years.
“Over the last 10 years cannabis certainly has increased the size of the general fund and the funding that we have available. Of course, our last sales tax measures have always helped us out a lot. And it helped us with the downturn that other cities experienced during COVID,” Gomez said.
Gomez said that Farmersville finance director, Steve Huntly, told the council that sales have declined writ large because of more dispensaries locating in nearby communities. Specifically, according to Gomez, there has been a 19% decrease in cannabis tax revenue. Another driver of this decrease is just different purchasing options that don’t include going to a brick and mortar location.
As a much larger economic trend, Gomez said that more people might be attempting to cut unnecessary costs. And that decrease in sales tax revenue this year has affected the city’s projections of a larger general fund.
“Things are more expensive and people’s spending has decreased. We’re all worried more about the essentials than we are about big ticket items. So, as a city, because a big part of our revenue is from sales tax, we have noticed that there’s a downturn in the economy,” Gomez said.
As a result Gomez said that Farmersville is trying to broaden their revenue streams so they “don’t rely so much on sales tax, because it is so volatile.”
Even with the decreased revenue, the draft budget is balanced this year and the city council is prioritizing the needs of residents.
“It is balanced. And depending on what happens this next year, people are predicting a recession, we’re not sure. We’re trying to keep the lights on and making sure that the residents are covered,” Gomez said.
Farmersville does have good news regarding growth and development in the city. “We do have some really good news in terms of development, we’re starting to experience some growth in the city. We’ve got affordable housing that’s going up,” Gomez said.