For example, if a government typically collects 95 percent of revenues
owed, the forecasted receipts should be 95 percent of the projected revenues,
not 100 percent. A collection rate can be determined by dividing the amount
of cash received by the amount of revenues billed. Suppose a local government
budgets property tax collections of $29.4 million for a given year.
Historical analysis shows that the government averages a 95 percent collection.
The estimate for tax receipts for the coming year should be 95 percent
of $29.4 million, or $27.9 million