Tuesday, June 18, 2024

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Sluggish year-end sales tax receipts worried one commissioner, but up overall – so far in fiscal year

One factor that consistently enables local governments to replenish their savings is the general tendency for tax revenues to come in over and above the budgetary predictions.

This pattern has been particularly noticeable in the case of sales tax receipts, which cities and counties often attempt to low ball as a hedge against the volatile nature of the retail economy.

In recent years, Alamance County has begun bucking this trend by setting higher, and presumably more accurate, sales tax projections to avoid padding the county’s reserves at the expense of the taxpayers. This tactic seems to have been eminently successful in eliminating the overage in this particular revenue stream: according to the county’s latest annual audit, the county’s levy on sales brought in some $306,055 less than the $46,507,414 anticipated in last year’s amended budget.

Lately, however, this close-to-the-skin approach seems to have heightened the anxieties of at least one member of county’s governing board who has been following the county’s incoming revenues with particular interest.

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“It’s [accuracy of sales tax revenue projections] very important for this upcoming budget. It makes me very, very nervous. Our projections next year will have to be dead on.”

– County commissioner Bill Lashley

Earlier this month, commissioner Bill Lashley warned the rest of the board that the county’s sales tax receipts from the tail end of 2023 were far lower than past experience would’ve suggested. Lashley insisted that this disappointing showing ought to chasten county officials as they prepare for the next financial cycle.

 

“It’s very important for this upcoming budget,” he went on to admonish his colleagues. “It makes me very, very nervous. Our projections next year will have to be dead on.”

According to the county’s finance department, the sales tax receipts for the closing months of 2023 were, indeed, a bit of the bust compared to the same period of 2022. In fact, this levy’s proceeds for the month of November were down some 5.71 percent from the previous year. Things improved somewhat in December, although that month’s haul was still a mere .57 percent higher than it was a year earlier.

[Story continues below chart with sales tax monthly revenues to Alamance County.]

 

Susan Evans, the county’s finance director, tried to assuage some of Lashley’s concerns over this drop off even as she confirmed the gist of his report to the other commissioners during the first week of March.

“We’re still seeing growth for December,” she went on to explain in a subsequent interview. “But it isn’t growth at the level we’ve had.”

In spite of these lackluster year-end returns, the county’s financial records indicate that the year-to-date sales tax receipts remain 3.48 percent ahead of where they had been at the same point a year earlier. In the meantime, the forecast for the next fiscal year doesn’t seem to have dampened the spirits of the county’s finance director.

“I’m not wringing my hands,” Evans affirmed earlier this week. “When we look at the sales tax projections in this [current year’s] budget, we’ve stretched that out to the max. But the thing about us being frugal with these projections is that we’re actually seeing them lining up with what we projected.”

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