Cumulatively, sales tax revenues in Sullivan County were about $401,000 below the previous fiscal year’s total, according to that report.
Hardest hit appears to be the Kingsport city area, where sales tax revenues were about $666,000 below the prior year. And that can affect budgets countywide, not just in the Model City.
According to Sullivan County’s current budget document, Kingsport businesses collected 63 percent of all sales taxes collected in the county in fiscal year 2007 — but the cash flow back to the city and the city’s school system accounted for only 45 percent of the money.
In contrast, 12 percent of all sales taxes collected in the county in fiscal year 2007 were collected at businesses located outside any of the cities — but cash flow back to the county and the county’s school system accounted for 34 percent of the money.
An 12-month spreadsheet by the budget office shows sales tax revenues countywide from May this year came in about $109,000 above May 2007.
It was one of only five months during the period to see an increase over the prior year.
Sales tax revenues are generated when money is spent on goods and services at businesses throughout the county and its cities. The money is used by local governments, largely, to support school systems.
When a consumer pays sales tax locally, it is sent to the state, which redistributes it back to the county and its cities based on collection site.
Sales tax revenue is typically distributed back to localities two months after being collected.
Taxes collected during April, for example, come back to the localities in June.
Local option sales tax revenues are split 50/50 — with half going to school systems in the county, and the other half going to the local government where the collecting business is located.
Each $1 of local option sales taxes collected in Kingsport, for example, generates 50 cents for the county’s three school systems (the money is split based on average daily attendance) and 50 cents for city coffers.
Between August 2007 and this month, sales tax revenues from non-city portions of the county were up about 14.24 percent — about $401,000 — compared to the previous year, according to the report.
Some of that increase, however, includes adjustments in the county’s favor for past months’ collections. Those adjustments were the result of findings from an audit performed by an outside firm at the county’s request.
From the report:
•Sales tax revenues received by local governments in Sullivan County from last August through this month totaled nearly $45.9 million. That’s down from about $46.3 million for the same period last year.
•For the same period one year prior, the state sent more than $29.16 million total back for sales taxes collected within the city of Kingsport — with half, or about $14.58 million — going to the city of Kingsport’s coffers and the other half being split among local school systems.
•For the 12-month fiscal year that just ended, tax revenues generated in Kingsport totaled more than $28.49 million, with half — roughly $14.24 million — going to city coffers, and the other half going to the school systems.
•Kingsport’s non-school share for the 12-month period showed a decrease of $333,000 compared to the previous year.
•The Sullivan County school system’s share for the 12-month period was about $12.68 million — a drop of nearly $254,000 compared to the previous year.
•The Bristol City Schools system’s share for the 12-month period was about $4.07 million, up $28,584 compared to the previous year.
•The Kingsport City Schools system’s share for the 12-month period was about $6.2 million, up about $25,000 compared to the previous year.
•The city of Bristol’s non-school share for the 12-month period was about $5.12 million, showing growth of $1,134 over the previous year.
•Bluff City’s total share for the 12-month period was about $291,500, down about $84,300 compared to the previous year.
Fiscal year 2008 ended June 30.
Fiscal year 2009 began July 1 and covers the county’s finances — and that of other local governments — through June 30, 2009.
The county does not yet have a budget for this fiscal year.