Greene County sales tax revenue slips

After sailing along through July, county sales tax revenues August–October dropped year-to-date revenues below the projected 3 percent growth, creating concern throughout county offices.

“It’s going to be hard to hit that for the year,” Greene County Budget Officer Jeff Reinold said, reiterating the message he gave commissioners during an Oct. 15 Greene County Commission meeting. “We’ll have to have three good collection months.”

Year-to-date sales tax revenues are now up only 1.9 percent through the county’s October collection period, which covers sales in August and September.

“Overall, we’re still up over last year. I didn’t want to paint a picture of doom and gloom, but there is some trepidation,” Reinold said.

August revenue was down 12.5 percent from 2006, while September was up just 2 percent. October’s collection was another drop, down 8.1 percent from 2006, according to the county budget office.

Each percent increase or decrease in sales tax revenue equals about $115,000 in county revenue.

The cause of the sluggish sales is unclear, because the budget department has not had an opportunity to compare same-store revenue figures from year to year, Reinold said.

County Commissioner Roseann Bentley said she thinks the housing market may be one of the culprits.

“We’ve usually been able to keep equilibrium better than other parts of the country, and we have the diversity to weather problems,” she said. “But certainly, one of the first indicators we look at is the housing market, and everyone knows that market has been slower this year.”

Reinold added that it’s not unusual to see two or three months each year come in below projections, pointing to 2006, when two of the last three months of the year brought in less revenue than the same months in 2005. But the yearly total was still up by 4.7 percent.

If figures don’t rise this year, it could throw a wrench into the county’s 2008 budget.

“If we have two months that we continue to drop and sales tax flattens completely, we would have to make some adjustments,” Reinold said.

County commissioners are reviewing a $129 million 2008 budget recommendation, and internal department budget meetings are ongoing.

Bentley said next year’s budget figures shouldn’t be impacted too heavily by sluggish sales tax numbers. The 2008 budget proposal is based on projected sales tax revenue growth of only 2.9 percent.

Adjustments, Reinold said, could come in the form of smaller or eliminated salary increases or in the delaying of nonessential road improvement projects.

County officials are hopeful the holiday season delivers the needed numbers. However, the national outlook for the holiday season is not encouraging. The National Retail Federation forecasts holiday retail sales growth of 4 percent compared to last year, the smallest increase since 2002.

“With the weak housing market and current credit crunch, consumers will be forced to be more prudent with their holiday spending,” NRF Chief Economist Rosalind Wells said in a news release.

Reinold doesn’t put much stock in the national forecasts.

“No one can say what’s going to happen, and what happens nationally may not happen locally,” Reinold said. “That’s why I brought (the falling numbers) to the commissioners’ attention.”[[In-content Ad]]