Gray: Sales Tax Could Fall Millions Short

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Story Published: Apr 13, 2009 at 12:13 PM EDT

Story Updated: Apr 13, 2009 at 8:21 PM EDT

Jefferson County's sales tax collections could be $2.3 million short this year, the chairman of the county legislature's finance committee said Monday.

Scott Gray is looking at sales tax collections for the first three months of this year.

The amount of sales tax collected in Jefferson County during the first part of the year sank by nearly $800,000.

That's a sign of continued weakness in retail business.

In the first three months of the 2008, $14,842,894 was collected.

This year? $14.063,729.

The drop works out to a little over five percent.

If that drop continues, the county ends up $2.3 million short of budget.

More optimistically, if first quarter collections this year are like first quarter collections in years past (first quarters are always slower than the rest of the year, so less than 25 percent of the year's sales tax gets collected, evenn though 25 percent of the year is gone) the county would end the year $928,622 short of budget.

Couple that, Gray notes, with the fact that the money the county makes in interest income will be down $500,000 or more and "We are left with federal or state aid to make up the difference, which is unlikely." 

Why should you care if you're not a government obsessive? Because this kind of problem can translate out in the real world to jobs lost, or programs cut or, over the long haul, higher taxes.

As Gray puts it: "The solutions - recognize the fact that we will use significant fund balance this year for operations, which is not the ideal use of fund balance, or make cuts."

Also, Nancy Brown, the county's treasurer, notes that the state as a whole suffered a loss of nearly six and a half percent, "with the larger metropolitan areas suffering the majority of the reduction."

One caveat - part of sales tax collection is the tax on gasoline. Gas is a lot cheaper this year than last, so less tax is collected.

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