At about a third of the way through the fiscal year sales tax revenues are not meeting expectations, the Navajo County Board of Supervisors learned Tuesday.
Finance Director James Menlove told the board that if revenues and expenditures continue on their current track, the county will end the year with a deficit of about $105,000. He noted, however, that even if revenues do not rise to predicted levels, spending will decrease to match revenues.
“We will make adjustments as we need to and we will be in the black by the end of the year,” he told the board.
According to a report prepared by Menlove, the county has collected approximately $3.64 million in state shared revenues so far this fiscal year. The budget anticipated that the county would collect a total of $10.93 million over the course of the year. The county’s fiscal year runs from July 1 to June 30.
For the first three months of this year, state sales tax revenues were above the amounts collected during the same period last year, but that trend reversed in October. In July, the county received $947,446, compared to last year’s $906,774. In August the county collected $944,452, which was more than the $921,603 received in 2013. The total for September this year was $918,923, while in September 2013 it was $916,833, and in October this year’s total was $835,393, while in 2013 it was $897,894.
Overall, the average difference between state sales tax revenues collected so far this year and those collected over the same time period last year is .06 percent, however, the current budget predicted increased revenues based on a recovering economy.
County sales tax revenues also dropped off sharply in October, leaving the county below the anticipated level for this year.
A total of $2.32 million in county sales tax has been received to date. In July and August, county sales tax exceeded the previous year, coming in at $615,676 in July and $637,439 in August, compared to $566,008 in July 2013 and $602,424 in August 2013. The trend changed in September, however, with a total of $580,157 collected, compared to $629,828 last year. In October, the county received $496,082, while in October 2013 that total was $592,451.
Collections of county sales tax for this October are the lowest in the last five fiscal years, according to Menlove’s report, with a previous low of $516,447 collected in October of the 2010-11 fiscal year.
To date, county sales tax revenues are 2.39 percent below the projected amount in the budget.
District IV Supervisor David Tenney noted that county officials believed they were being conservative when predicting sales tax revenues, setting the amounts below projections made by state officials.
“The state projected even higher,” he said. “Ours are lower, but the revenues are still lower than expected.”
He noted that a recent contract with the Bureau of Indian Affairs to house inmates at the county jail should produce enough revenue to cover a shortfall.
“The BIA contract gives us room to breathe,” he said. “We will continue to look for other ways of addressing the shortfall.”
Chairman Jesse Thompson noted, “We’re doing the best with what we have. It wasn’t easy to get here, we had to struggle just to get to this point.”
