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Sales tax revenue disappoints again

Andy Ouriel • May 20, 2014 at 11:20 AM

The year’s shortest month produced yet another small sales tax collection for Erie County.

Consumers purchasing taxable goods in Erie County during February produced about $1.43 million in local sales tax income.

County officials finalized February’s figures this month. It typically takes three months for officials to calculate a particular month’s actual sales tax collection. The latest collection continues a disappointing trend for sales tax figures.

For four out of five months this year, actual tax collections have fallen short of the budgeted amount.

Constant shortfalls in month-over-month collections have translated into about a $340,000 overall deficit thus far in 2014.

“The sales tax figures coming in are as dismal as the weather was when these numbers were generated in February” Erie County commissioner Bill Monaghan said. “We could have another disappointing report with the March sales tax that will be reported in June also because of the weather during that month”

Sales tax money represents about half of Erie County’s annual income injected into the $27 million everyday operating budget. The money funds many public services, including court, sheriff and maintenance operations.

2014 tax outlook

Erie County will collect a sizable amount of sales tax money this year.

Beginning this past October, shoppers buying taxable goods in Erie County paid a higher tax rate.

In July, county commissioners voted to temporarily raise the sales tax rate for one year. The increase is expected to generate an extra $7.2 million in 2014 for a yearly total of about $22 million in sales tax money. The additional $7.2 million is strictly earmarked to fund infrastructure improvements.

The state’s portion of the sales tax also increased at the same time the county’s temporary tax spike kicked in.

Here’s a breakdown of the past, present and future tax outlook in Erie County:

•6.5 percent: Tax rate prior to October, with 5.5 percent going to the state and 1 percent going to Erie County.

•7.25 percent: Tax rate from Oct. 1, 2013, to Oct. 1, 2014, with 5.75 percent going to state and 1.5 percent going to Erie County.

•6.75 percent: Tax rate from Oct. 1, 2014, going forward, with 5.75 percent going to state and 1 percent going to Erie County.

•Actual collection to date: $7.39 million

•Budgeted amount to date: $7.73 million

•Up or down: Down about $340,000

•Year-end goal: $22 million

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