Knox County tax revenue figures show signs of caution for budget

Knox County tax revenue figures show signs of caution for budget


6 News Reporter

KNOXVILLE (WATE) -  We are getting a look at new tax revenue figures for Knox County and it could mean more cautionary signs for the budget.

On Monday commissioners heard about July sales tax numbers coming in lower than the same month last year. This comes just a few days after the county announced a $26 million budget surplus at the end of the last fiscal year.

Knox County Mayor Tim Burchett has been urging commissioners to tighten their belts when it comes to spending.

"Any surpluses we have now, we have to realize that those can possibly short-lived and those can be very short lived," Burchett said.

Numbers out for delinquent property tax collections show the county is down $1.1 million in July and August 2012 compared to those months in 2011.

"Delinquent properties property tax collections have come in higher than we targeted in the past and we'd hope that trend would continue," said Burchett.

Knox County officials Monday projected a $2.7 million sales tax deficit by the end of the 2013 fiscal year.

A recent state report shows sales tax collections decline about $945,000 in July when compared to July 2011.

Many said it is because of a spending bump in July of 2011 when contractors and homeowners purchased supplies in wake of last year's hail storms.

"Everyone is trying to analyze numbers, but I think one of the things we're doing is trying to figure what has happened," said Knox County commissioner Mike Hammond.

A recent East Tennessee tourism study conducted by Dr. Steve Morse, a UT economist said summer 2012 was "a slow summer for Knoxville and Knox County."

The report cited declines in sales of hotel rooms and hotel occupancy rates from summer 2012 to summer 2011.

The numbers of hotel occupancies in Knox County have decreased by 12 percent from May 2012 to May 2011.  The occupancy rate decreased 9 percent from June 2012 to June 2011, and 10 percent in July.

"There are a lot of reasons: gas prices, people traveling from a leisure prospective, those can impact those numbers," said Visit Knoxville CEO Kim Bumpas.

The county's collection of hotel/motel tax has decreased eight percent in July 2012 from July 2011.

Hotel/motel tax collection, however, is up 11 percent from the 2012 to 2011 fiscal year.

"You can have lower occupancy but a higher rate therefore that equals a flat or a slightly up tax collection," said Bumpas.

The finance department anticipates delinquent tax collections to go back up in the fall, others hope sales tax collection will rebound during the holiday season.

"October, November, December, for a lot of people that is their selling season. So we really need to look at our sales tax collections and also property taxes will start being paid in October. So, October, November, December will be critical for us as we look to next year," Hammond said.

Knox County Commission meets again next week.  They are expected to vote on $500,000 in one-time funding to the Knoxville-Knox County Community Action Committee for a transportation program geared toward the elderly.

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