Fayette preps for 8% drop in tax revenues
While lower property values shrink county’s tax digest, sales tax collections reveal increase in local retail sales
With property values set to fall again this year, the Fayette County Commission is facing a potential $2.2 million shortfall in the general fund that it will have to make up somewhere.
The county tax digest, an aggregate calculation of property values, is expected to drop from last year’s value of $4.7 billion to $4.4 billion this year, although the figures aren’t finalized yet, the commission was told last week at its financial planning meeting.
The figures work out to an 8 percent decline facing the county, which will put property tax revenues at the lowest level since 2004, County Administrator Jack Krakeel said.
A significant hit has been the recent requirement enacted by the Georgia General Assembly that forces the county to factor in non-arm’s length real estate transactions when calculating property values, Krakeel said. Previously Georgia counties have been able to dismiss those lower-skewing sales, such as foreclosures and short sales, from being considered.
There is a glimmer of hope, though, in the sales tax figures for the first seven months of the current fiscal year. Each month has seen higher collections than the same time last year. If that trend holds, the county will end the year with $10.1 million in sales tax revenue, up from a low of $8.99 million in 2009.
On top of that good news, it appears that the county will avoid the need to dip into its fund balance by the projected $1.2 million that was budgeted last year, said Finance Director Mary Holland.
Plus, the county has accrued a “rainy day fund” of $12.2 million to help deal with the fiscal difficulties that have unfolded since the national economy began to head south in 2008.
The county has eliminated some 24.5 staff positions since 2010, which translated to a $1.1 million savings each year, officials said.
As for the $2.2 million shortfall in property taxes, county financial staff thinks more than $500,000 can be saved by paring down complete or obsolete capital projects, Holland said. That would cut the shortfall to $1.66 million, and the financial staff will be preparing more ways to address it in the coming weeks, she noted.