Sales Tax Revenue Slump Continues
Poloncarz Administration predicted 3.73% annual growth from 2012 to 2013. Actual growth for the first five months of the year is 2.28%. That equals an almost $6 million hole in this year’s budget
(Buffalo) – Erie County Comptroller Stefan I. Mychajliw is reporting January 2013 - May 2013 sales tax revenue for Erie County to be $170,007,216. That represents year-to-date sales tax revenue growth of only 2.28%. The actual sales tax growth for the first five months of the year falls far short of the administration’s overly optimistic and aggressive projection of 3.73% annual growth.
Administration’s projected Year-To-Date growth: 3.73% Actual Year-To-Date Growth: 2.28%There will be gaps in this year’s budget if the Poloncarz administration falls short of its annual sales tax revenue growth projection of 3.73%. If sales tax revenue continued to grow at the pace at which it has for the first five months of the year, it would create an almost $6 million hole in the 2013 budget.
Potential Budget Gaps Based on 2013 Sales Tax Growth
Actual 2013 Year-to-Date 2.28%: - $5,958,7701%: - $11,206,1512%: - $7,098,9483%: - $2,991,7453.73%: $0Sales tax revenue must grow 4.71% for the remainder of the year in order for the administration to reach their own overly optimistic projection of receiving $426,033,687 for 2013.
2011 Sales Tax Revenue: $400,993,639 2012 Sales Tax Revenue: $410,720,332 2013 Projected Sales Tax Revenue: $426,033,687The year-to-date sales tax revenue growth for the first five months of 2013 (January - May) is 2.28%.
January-May 2012 Sales Tax Revenue: $166,221,351 January-May 2013 Sales Tax Revenue: $170,007,226 Year-to-Date Difference: + $3,785,865 or + 2.28%The budget gap figures comes on the heels of the Office of Erie County Comptroller releasing actual revenues received for May 2013 sales tax:
May 2012 Sales Tax Revenue: $41,633,798 May 2013 Sales Tax Revenue: $40,757,380 Difference: + $876,418 or + 2.15%The release of the May 2013 sales tax revenue report comes continued warnings representatives of both the Erie County Division of Budget and Management and Office of Erie County Comptroller of whether or not the Administration’s own sales tax projections for 2013 are realistic:
“We are worried about some of the trends in sales tax.” Source: Erie County Deputy Budget Director Dr. Timothy Callan, Erie County Legislature Finance and Management Committee, May 2nd, 2013
“In sales tax, again, if we had to budget it over, I would have budgeted less in sales tax.” Source: Erie County Budget Director Robert Keating, Erie County Legislature Finance and Management Committee, May 2nd, 2013
“The sales tax number is an area of concern.” Source: Erie County Deputy Budget Director Dr. Timothy Callan, Erie County Legislature Finance and Management Committee, May 2nd, 2013
“(We) hope that sales tax comes in better than we expect, but right now we don’t think that is going to be the case. We think the budget for sales tax this year is overly optimistic. We are not going to make budget on that.”
Source: Erie County Deputy Budget Director Dr. Timothy Callan, Erie County Legislature Finance and Management Committee, March 14th, 2013
“This issue of sluggish sales tax growth so far this year will most definitely be discussed during the upcoming mid-year budget hearings. There is cause for concern based on these lower than anticipated revenues. Don’t take my word for it. I agree wholeheartedly with the administration’s own budget representatives when they sounded the alarm as well. Our office continues to closely monitor actual sales tax revenue month by month and will report figures to the Legislature, County Executive, and public,” said Erie County Comptroller Stefan I. Mychajliw.