03/02/09 — November sales tax receipts lower

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November sales tax receipts lower

By Steve Herring
Published in News on March 2, 2009 1:46 PM

The county's sales tax receipts continued to decline in November, but not quite as sharply as they did in October.

The two months combined fell by $1,099,590 compared to the same two months in 2007. Sales tax funds for October and November 2007 totaled $3.8 million, while figures for October and November 2008 totaled $2.7 million.

The economy as well as the state's Medicaid relief plan are being blamed for the continued slide.

The November revenues fell by $456,507 compared to a decline of $643,082 in October.

The county received $1,405,363 for November 2008 compared to $1,861,870 in 2007. Collections for October 2008 were $1,328,384 compared to $1,971,466 in 2007.

The continued slide could mean the county will face more than a $2 million budget shortfall before the end of the current fiscal year.

County Manager Lee Smith has said the budget should be able to absorb the hit because he had underestimated the amount of sales taxes the county had been forecast to receive.

Also helping is that the county has been able to cut expenses over the past several years, Smith said.

What the county is waiting to see are the December numbers. Since counties live three months in arrears on sales tax revenue, it will be next month before those figures are available.

The sales tax money for October and November 2008 was received in January and February respectively.

November's numbers were bad, but not as bad as expected, Smith said.

The General Assembly last year agreed to provide some help on Medicaid relief to the counties, but voted to end the Article 44 quarter-cent sales tax beginning Oct. 1, 2008.

The state is supposed to assume 100 percent of county Medicaid costs beginning in July 1, 2009.

Originally, Article 44 was a half-cent sales tax that went to counties. This past October, the counties began receiving only a quarter-cent sales tax from Article 44 instead of the half-cent sales tax as part of the Medicaid swap.

For Article 44 the county received $112,736 for October 2008 and $121,909 for November 2008.

In 2007, the county received $359,724 for October and $320,626 for November. Article 44 was a half-cent sales tax at that time.

County officials said they are unsure if the county will realize much help with Medicaid this year. One of the reasons, they said, is because of an increase in requests for services.