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County Cash Flow Cant Keep Pace
Halfway through FY06, the county had received $25.7 million in property-tax revenue. But those receipts only totaled $5.8 million at the end of the second quarter of FY07. The staggering difference is due to the change the state made to property tax payment dates.
What was a two-date system, where portions of the tax were due in December and July, now has a single payment date in July. Under the former system the county received some property-tax revenue in the first half of the fiscal year, as last year it got a third of the total tax receipts by the end of June. But for the first six months of this year, the county had only received 6 percent of the $87.4 million in total tax revenue it expects to collect this year.
The lack of tax revenue has put a strain on cash flow, and a midyear report showed the county's cash balance at $72.3 million, about $10 million less than it was at this time last year. Fiscal Services Director Robert White told the Finance Committee last week the county's cash reserve would cover 125 days of operation. The reserve covered 142 days last year.
White said the cash reserve would begin to rise in a few months when the county collects its property-tax revenue. But it will start to decline again next year when the State Revenue Sharing Reserve Fund drops by a projected $11 million. White said midway through next year, the cash reserve will only fund 61 days of operations, unless commissioners cut some services or reduce the work force.
The general operating fund, which pays for most county services, is on track to be $165 million this year and have a deficit of $3.6 million. White said $2 million of that shortfall is due to higher health insurance costs for employees and retirees. The other $1.6 million comes from
Total revenue to the general operating fund is expected to be $161.3 million for the year, up by 6 percent from last year. Transfers from three other accounts will deposit $28 million of that revenue total into the fund.
Revenue to the county's lodging-excise fund was also down, but by only 1 percent for the first half of this year. Receipts rose by 12 percent for the first six months of last year. White said if revenue to the hotel-motel tax rises by 6 percent in the year's second half, receipts for the year would go up by 3 percent and reach about $5 million, or about $400,000 less than what was forecast at the start of the fiscal year in January.
If revenue to the account does total $5 million, White said the fund would have a deficit of $1.4 million this year, and the fund balance for next year would drop to about $2 million.
"You won't be able to sustain the existing programs at this level," White told the finance committee.
The fund's expenditures this year are $6.6 million.