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Third-quarter sales tax figures released last week turned a projected $300,000 deficit in 2000 to a $225,000 surplus, and so City Council members have pledged not to enact a proposed three-year, 3 percent hotel tax even if voters approve it in November, Larsen said.

But business leaders who fought so hard against the proposed tax say city officials are trying to quiet critics and avoid the humiliation of the tax being trounced in the mail ballot already under way.

''Most people in our country think that the last resort is a tax,'' said Mike Dunafon, president of the Tea Party opposition group. ''So we fought it and fought it and fought it. And they discovered how much resistance they were met with and all of a sudden re-sharpened their pencils and discovered: 'whoops, whoops.' ''

Larsen said revised budget projections were a pleasant last-minute surprise.

The city is anticipating the possible loss of up to $600,000 in sales tax revenue after the closure of Builders Square. The hotel tax would have made up about $400,000 per year, Larsen said.

However, sales tax figures released Wednesday showed sales taxes up more than 8 percent, leading to projections of about $7 million in sales tax for 2000 and making the hotel tax unnecessary, Larsen said.