San Juan County finances review | Guest column
Published 4:51 pm Tuesday, June 11, 2013
by F. Milene Henley
SJC Auditor
The first quarter of 2013 was a disappointment, at least on the revenue side. In particular, sales tax revenue to San Juan County did not meet expectations. Whether the county can meet revenue projections for the year will depend on activity picking up in this and other key sectors in the following quarters.
First quarter sales tax collections in 2013 lagged first quarter collections in each of the previous five years except 2011, for no obvious reason. Having enjoyed a fairly mild weather this winter, we can’t blame the weather for lack of sales. Notably also, retail trade state-wide was up in the first quarter compared to 2012.
Real estate sales were mixed. On San Juan, both dollar volume and number of transactions were significantly down (22 percent and 18 percent, respectively) compared to first quarter last year. Orcas picked up the slack with a 73 percent increase in dollar volume and a 36 percent increase in number of transactions. Transactions on other islands were flat. County-wide, there was a 9 percent increase in dollar volume over first quarter 2012.
Income to the county from real estate sales comes in the form of real estate excise tax: .5 percent of sale price for capital improvement funds, and 1 percent for land bank funds. With increased sales county-wide, excise tax collections in the first quarter have been strong and increasing each month.
Another favorable revenue area is permitting and planning, which holds the promise of future building and associated sales tax revenue. First quarter 2013 revenue in this area almost matched the first quarter of 2012, which ended as our strongest year since 2008.
Total current expense (general fund) collections for the first quarter just met budget projections, despite low sales tax collections. Part of this achievement is because of unusually high intergovernmental funding in health and community services. Unfortunately, the high level of this income was a timing issue and does not reflect any real increase in revenue. So while the figures made the first quarter look good, they are not a substitute for lost sales tax revenue.
But what really bothers me about this shortfall in sales tax revenue is that it also implies a shortfall in sales for our local businesses. Just when we thought we were coming out of this economic malaise, we seem to have taken a step backwards. I’m hopeful that the setback is temporary. I’m going to do my part by making sure I buy locally and support my local businesses. I encourage you to do the same.
