The Farmersville City Council has taken steps to prioritize the needs of residents while dealing with the negative impact of decreased cannabis sales on the general fund.
Farmersville has been hit by a sharp reduction in cannabis sales, resulting in a strain on the upcoming budget. Despite this setback, the city has been able to put together a balanced draft budget, with hopes for further development in the future.
During the council meeting on May 8, the draft budget for 2023-24 was discussed, and it was revealed that the biggest revenue loss was due to the decreased cannabis sales. Nevertheless, the draft budget remains balanced, and the council is focusing on undertaking necessary improvements in the city.
The biggest impact on Farmersville’s general fund was from Measure Q (cannabis business tax), attributed to a reduction in cannabis sales. According to Farmersville staff reports, revenue from Measure Q has declined for eight consecutive quarters, with an average loss of 6% per quarter.
Council Member Greg Gomez noted that cannabis sales from local dispensaries had previously contributed to an increase in the general fund in recent years.
“Over the last 10 years, cannabis has certainly 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,” said Gomez.
Gomez further stated that Farmersville’s finance director, Steve Huntly, informed the council that sales had decreased due to the presence of more dispensaries in neighboring communities. Specifically, there has been a 19% decrease in cannabis tax revenue. Another reason for this drop is the availability of different purchasing options that do not involve visiting a physical location.
Gomez suggested that more people may be attempting to cut unnecessary costs, resulting in decreased sales tax revenue. This economic trend has affected the city’s projections of a larger general fund.
“Things are more expensive, and people’s spending has decreased. We’re all more concerned with the essentials than we are with big-ticket items. As a city, because a significant portion of our revenue comes from sales tax, we have noticed a downturn in the economy,” Gomez added.
As a result, Farmersville is attempting to expand its revenue streams to reduce reliance on sales tax, which is highly volatile.
Despite the decreased revenue, the draft budget remains balanced this year, and the city council is prioritizing the needs of residents.
“The budget is balanced, and depending on what happens this next year, with people predicting a recession, we’re not sure. We’re trying to keep the lights on and ensure that the residents are provided for,” said Gomez.
Farmersville has good news regarding growth and development in the city, with affordable housing projects in the making. “We 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.