Poloncarz Administration predicted 3.73% annual growth from 2012 to 2013. Actual growth for the first ten months of the year is 3.26%.
That represents a $1,923,873 million shortfall in the 2013 budget.
(Buffalo) – Erie County Comptroller Stefan I. Mychajliw is reporting January 2013 - October 2013 sales tax revenue for Erie County to be $343,221,482. That represents year-to-date sales tax revenue growth of 3.26% for the first ten months of the year, which is lower than last year and below what the administration budgeted.
Administration’s projected Year-To-Date growth: 3.73%
Actual Year-To-Date Growth for ten months: 3.26%
There will be significant 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 ten months of the year, it would create over a $1.9 million hole in the 2013 budget.
Potential Budget Gaps Based on 2013 Sales Tax Growth
Actual 2013 Year-to-Date 3.26%: - $1,923,873
1%: - $11,206,151
2%: - $7,098,948
3%: - $2,991,745
3.73%: $0
Over the next two months sales tax revenue must grow 5.73% 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: $426,033,687
The year-to-date sales tax revenue growth for the first ten months of 2013 (January-October) is 3.26%.
January-October 2012 Sales Tax Revenue: $332,396,813
January-October 2013 Sales Tax Revenue: $343,221,482
Year-to-Date Difference: + $10,824,668 or + 3.26%
The budget gap figures comes on the heels of the Office of Erie County Comptroller releasing actual revenues received for October 2013 sales tax:
October 2012 Sales Tax Revenue: $30,848,069
October 2013 Sales Tax Revenue: $32,413,758
Difference: + $1,565,689 or + 5.08%
Both the Offices of the Erie County Comptroller and County Executive are on the same page concerning this issue, with the administration publicly presenting numerous warnings about their own sales tax revenue projections:
“We are worried about some of the trends in sales tax.”
Source: Erie County Senior Budget Consultant 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 Senior Budget Consultant 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 Senior Budget Consultant Timothy Callan, Erie County Legislature Finance and Management Committee, March 14th, 2013
“These numbers are not good. With ten months of sales tax revenue in, the county is falling short of budget. It is unlikely that the growth pace will increase to nearly 6%, meaning the county must be prepared for a multi-million dollar shortfall,” said Comptroller Stefan I. Mychajliw. “The Office of Erie County Comptroller and Wall Street have been consistent in our responsible warnings that relying heavily on sales tax revenue is risky.”
“The reality is, we are looking at an almost $2 million miss on our sales tax revenue target for 2013. This is significant, and the direct result of overly optimistic budgeting,” said Mychajliw.