Picente: County Sales Tax Revenue Declines

Oneida County Executive Anthony J. Picente, Jr., today announced that Oneida County’s sales tax receipts for the first half of 2009 have only declined .51% from the first half of 2008.

“Our sales tax revenue estimate for 2009 was very conservative,” Picente said. “What we are seeing is an overall spending slowdown, which is happening all across the state and all across the nation, as well as the impact of the reduction in gasoline prices from the levels of late 2008.”

“At budget time last year we knew we had a very uncertain economy and that we needed to be conservative in all of our revenue projections. These figures are a sign that we need to be very cautious, and continue to maximize existing revenue while holding down costs in order to stay in the black,” Picente said, noting that many New York State counties have been reporting sales tax declines of between 5 and 10% through the first six months of 2009, compared to their 2008 revenues for the same time. “In the context of what we are seeing around us, we are very concerned, but this is not a cause for panic. We have been managing all year long to maximize the revenue we have, and we will continue to do that through an approach that extraordinary scrutiny upon what might in the past have been considered usual expenses.”
In December 2008, Oneida County removed its cap on the sales tax on gasoline. Under the change, instead of foregoing sales tax when the purchase price exceeded $2 per gallon, the county would receive sales tax on the full price per gallon. Projections made at a time when gasoline was selling for roughly $4 per gallon had estimated that removing the tax cap could bring in $3 million in 2009 if a gallon of gas averaged $3.50 next year. However, gasoline prices have fallen well below that level, reducing the county’s projected sales tax increase.
$41,068,280 has been received to date from the first two quarters of 2009. That figure shows a 0.51% decline from the same two quarters of 2008.
Oneida County budgets that it will collect $88,232,500 in sales tax revenue in 2009, making that the largest source of revenue in the county budget sales tax revenue. The amount received to date is 6.91% below the budgeted amount. Picente noted that sales tax receipts are typically smaller in the first half of any year than they are towards the holidays.
He noted that the difficult economy has forced consumers to retrench and postpone large-ticket purchases. “There is some hope that vehicle sales will increase as the ‘Cash for Clunkers’ program takes hold,” Picente said. “However, until we see a positive demonstration of renewed consumer confidence, we will continue to manage this year’s budget on the assumption that we will continue to manage this year’s budget on the assumption that reaching our targeted sales tax projections will be difficult and remain confident that the President’s economic plan will result in a positive demonstration of renewed consumer confidence. Conditions warrant that we will also be looking at cautious sales tax estimates in 2010 as we develop our budget.”