Guilford County gets most of its revenue each year from property taxes, but sales tax revenue is the county’s number two source of income and, for the, 2018-2019 fiscal year, sales tax revenue is running significantly behind projections.
The total estimated sales tax revenue for the county in the current fiscal year was $91 million and the county planned to spend that money on things like schools, social services, public health, law enforcement, animal control, construction and debt repayment. A shortfall in that revenue stream makes it harder for the county to make ends meet.
Guilford County is already behind $850,000, with only two months of fiscal 2017-2018 – July and August – accounted for. If that trend continues or worsens for the remaining 10 months of the fiscal year, Guilford County will take a multi-million dollar hit.
Sales taxes are collected by the state and then distributed to the counties and cities. Guilford County Budget Director Michael Halford wrote in an email that it takes some time for the state to process the sales tax revenue and distribute it, which is why Guilford County only has two months of revenue at this point.
“As of the end of November, we’ve only received two of the 12 monthly distributions – they are always delayed a few months because of the vendor reporting/analysis work at the state,” Halford wrote.
He added that, while the county is $850,000 “behind where we thought we’d be by now,” it’s difficult to read too much into the situation since the data only reflects two months of the year.
Conversely, a pessimist might take the shortfall as a very bad omen because, if the trend holds up for the remaining 10 months in 2018-2019, that could be a $5 million hit to the county’s budget.
Halford also said that he’s not sure of the reason for the shortfall.
The biggest determinant of sales tax revenue, of course, is how much stuff people are buying in a county or city, but there are other factors at play such as the state’s timing for paying out sales tax refunds to businesses that are due one. It could be that a lot of those refunds are being paid out all at once.
In 2014-2015, Guilford County pulled in $76.4 million in sales tax revenue. In 2015-2016, it was $80.3 million; in 2016-2017 it was $83.9 million and, in 2017-2018, it was $85.5 million. County officials projected that, with the economy continuing to heat up, the county would receive $91 million in sales tax revenue in the current fiscal year, which ends on June 30, 2019. That’s over $5 million more than in the previous fiscal year.
By way of comparison, this fiscal year Guilford County anticipated getting $373 million in property tax revenues, $67 million in federal and state funds and $40 million in revenue from fees and user charges.