Early estimates show that Island County’s sales tax revenues are down from last year despite more optimistic projections.
“It cooled down,” said Budget Director Elaine Marlow during last week’s commissioner work session. “That’s quite a bit less than what you saw in 2014 at the same time.”
However, commissioners agreed that it’s too soon to worry.
“It’s so early in the year,” said Commissioner Rick Hannold. “It’s too early on pulling the trigger on trying to panic.”
The county saw a 9 percent increase in 2014 but projections show 2015 coming in at only a 5 percent increase, instead of the 8 percent that was projected. The difference would translate to a $100,000 decrease in budget capacity.
The county saw less than 2 percent increase in revenues in 2013.
Growing revenues over the last couple of years allowed the county to add back services that were cut during the economic recession that began in 2008.
The county was on a virtual roller coaster ride in sales tax revenues over the last several years, plummeting to a negative 14 percent sales tax growth in 2009. Things slowly improved, but really started to pick up in 2013, Marlow said.
Sales tax revenues were particularly strong last year.
Commissioner Helen Price Johnson said that the dip in sales tax revenue for 2015 shouldn’t be problematic because money was allotted in the general fund for contingency.
“We won’t have to cut staff or reduce force,” Price Johnson said. “We were optimistic; I still continue to be actually.”
Marlow said she’s seeing similar trends in sales tax coming from the county’s juvenile detention and mental health programs, but that they have the financial capacity to make up for the shortfall.
“I think we’re moving back into a more normal trend,” Marlow said Tuesday. “As the economy normalizes you’re not going to see those big increases.”
Marlow said she’s more concerned with how things will play out on a state level.
For instance, Marlow said the state may pass legislation that would remove a rebate for “distressed” rural counties on economic development taxes, or .09 funds.
“The state has some big challenges in funding education and other programs,” she said.
Marlow and Price Johnson both called the legislation “concerning.”
