Marshall County's revenue from property and sales tax collections is down by more than $1 million compared to what was projected last summer when county commissioners adopted the budget they're using now.
It's a result of foreclosures, lower sales receipts and some industries taking equipment away so it's not subject to personal property taxes, said County Mayor Joe Boyd Liggett who provided the following numbers several hours before a county budget meeting on Thursday afternoon.
"The penny is not worth what it used to be," Liggett said of a basic calculation on tax revenue realized from each penny on the property tax rate.
Real estate usually appreciates in value, but not this year, so the county's property tax base isn't worth what it used to be and that's lowered the amount of money generated by each penny on the property tax rate.
Last summer, the county's property tax rate was increased to $3.09 per $100 of appraised value. At that time, each penny on the rate generated $51,000. Recent calculations at the Courthouse Annex show that this year each penny on the property tax rate will generate about $48,800.
"It's been a few years since it's declined," Liggett said of that revenue stream.
The decline in anticipated revenue from property taxes is about $680,000, the county mayor said.
"Certain areas went up but there was too much negative," Liggett said, itemizing the areas of bankruptcy, properties put on the market because of foreclosure and personal property taken away by industries that have closed.
"There were some properties that went up in value, but this overshadows it," he said.
"The other thing was sales taxes," Liggett said. "Marshall County did real well during the first half of this past fiscal year. We were actually showing a plus in that column during that part of the year.
"Probably you could attribute that to high gas prices and people staying home and buying locally...
"In about December, the numbers started to decline and, as we all know, that's when the whole world's economy took a hit. Up until that point we were ahead of last year.
"We're probably looking at a 20 percent shortfall in sales tax collections," the county mayor continued. "That's an estimate because we don't have the final figures."
Sales tax receipts collected by retailers in one month are received and calculated by the state in the following month. Reports on that economic indicator come thereafter.
Comparing what was anticipated last summer for the fiscal year's sales tax revenues of $1.9 million to a more refined estimate - based on 10 months of real figures and only two months of projections - shows the county might expect $1,523,000, or a shortfall in this revenue stream of about $377,000.
Added to the reduction of $680,000 from property tax revenue, the $377,000 decline in sales tax revenue reflects a $1,057,000 decline in revenue to the county.
Meanwhile, collection of the adequate facilities tax was expected to be down by more than a third. The tax is based on the sales of construction permits and the number of new enclosed buildings planned for construction.
A reduction isn't surprising, given the housing slump, but it's a serious problem for the Marshall County Board of Public Utilities (MCBPU) because it's authorized to draw all of the revenues up to $300,000 annually.
The adequate facilities tax is charged on each square foot of new construction. Since construction is considerably less than what it was, the adequate facilities tax is generating fewer dollars.