Monday, March 2, 2015

Storms could ding sales tax revenue

Chris Caldwell
Overall sales tax revenues for Knox County are up right now, but they could take a hit because of February’s snowstorms.

However, Knox County’s finance director, Chris Caldwell, says he’s not hitting the panic buttons just yet.

“It will be interesting to see what the February tax numbers are this year with the snow and ice events,” Caldwell said. “I would expect a possible decrease.”

Just how much, though, is not known at this point. The county won’t get the numbers back from the state until mid-April.

As it stands, the county is up $5.9 million in sales tax revenues from July through December – the first six months of the current fiscal year – compared to the same time period last year. The total does not include sales tax revenues from Knoxville or Farragut.

Overall county expenses are about even, so Caldwell said he’s confident that the numbers will eventually work themselves out.

But, the sales tax revenues are often fickle and officials say recent inclement weather could hurt them.

Last month was one of the coldest Februarys in Knoxville’s history with an average temperature of 32.1 degrees, which is 10.3 degrees below normal.

In addition, 8.2 inches of snow fell for the total month, which is 6.6 inches more than the average February.

Knox County schools were closed Feb. 16 for Presidents’ Day when the snow first fell and remained closed due to weather through Feb. 27. Many businesses were shut down as main and secondary roads were hazardous for drivers, and the Knoxville Police Department and the Knox County Sheriff’s Office responded only to life and death emergencies.

“There will be an impact,” Caldwell said. “But I don’t think you’ll see it being horrible.”

Knox County, Knoxville and Farragut brought in a combined $15.6 million in sales tax revenue in February 2014.

Sales tax revenues make up only 6.3 percent of the county’s overall general fund, but comprise about 30 percent of the school system’s budget.

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