Tonawanda News — November sales tax revenues for Erie County spiked by more than $250,000 over 2011 figures, though newly elected Comptroller Stefan Mychajliw said overall there’s still cause for concern.
“Ideally we would have liked sales tax revenue to exceed budget projections,” he said. “However, it is a positive indicator that there is sales tax growth, and that we are on par with budget projections.”
November 2012 sales tax revenues for the county amounted to $42,203,079, a leap from 2011’s $41,944,461 take. The year-to-date sales tax growth is set at 2.52 percent, which is about on par with projections according to the comptroller, who said despite the growth the county’s reliance on a volatile system remains a risk.
“Unfortunately, Wall Street does not look favorably on a county that relies so heavily on sometimes-shaky sales tax revenues,” Mychajliw said. “If sales tax revenues ever tank in this troubling and unstable economy, Erie County can be in serious trouble. Wall Street ratings agencies prefer counties to rely mostly on steady property tax revenues, rather unpredictable sales tax revenues.”
Mychajliw also pointed to a recent Fitch Ratings report, a global ratings agency, which indicated that the county’s reliance on federal and state funding could lead to future repercussions.
“The concern is that sales tax revenue did not exceed budget projections,” Mychajliw said. “Because of the serious cash crunch Erie County faced on the first day of the year, higher-than-projected sales tax revenues could have given the budget an extra cash cushion. That did not happen. The good news is that it appears as though Erie County will meet the sales tax growth as projected in the 2012 budget.”Source: Tonawanda NewsStaff Reports, January 12, 2013 Click here to view original story