Grand Forks Sales Tax: Accuracy v. Stability

Last week I argued (here) that the city’s use of the rolling twelve month total was not really about accuracy as much as stability. Essentially the two concepts are conflated in the presentation. I still fail to see the virtues of knowing the total sales over the last twelve months, and how it better informs policy decisions. I present the following graphs to demonstrate my points about stability. Here is the monthly collection amount (recall there is approximately a two month lag between sales tax collections and the reported amount).

So the graph gets a bit crazy at times though the general pattern is clear with more recent values higher on the chart and a different color. Also of importance is the variety and volatility from collections in the middle of the year. These seasonal fluctuations are a vital part of understanding the revenue generation process has consequences for the revenues on hand at any given time compared to the spending required. Here is what the rolling twelve months looks like, broken out by calendar year.

Flat. Almost every one of them is a simple straight line. Does this seem more accurate? Again, I think the argument is about stability. To look at this number you would think we have in the range of $20 million on hand from sales tax collections in any recent month.

Anyone who reads any of my work knows I am fine with data manipulation to better understand outcomes and inform policy, but I am not seeing how that occurs here. It is also the case we are just talking about the actual data at this point, not even the accuracy of a forecast measure. More on this to come.

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