Local sales tax collections have seen a three percent reduction year-over-year from April 2019 to April 2020. These numbers are noteworthy following the start of Henry County’s SPLOST V program on April 1.
Sales tax receipts published by the state department of revenue trail one month behind consumer spending. The latest numbers released on May 31 represent April spending and continue to expand our understanding of impacts on tax collections due to the coronavirus pandemic.
In April 2020, Henry County merchants collected $3,111,561.97 in SPLOST V proceeds. One year prior, during the final year of the SPLOST IV program, merchants collected $3,206,697.89.
The $3.1 million in collections represent the first contribution towards Henry County’s level II projects, headlined by plans for a new county-owned aquatic center. State law requires the first twenty percent of collections, or $40.8 million, to be set aside for the level II projects.
Accumulating $40.8 million is estimated to last 16â€“18 months. This may last longer because of the pandemic and resulting economic recession.
City and commission district projects, including transportation improvements, cannot receive funding until the first twenty percent has been collected and set aside. The one exception to this rule involves the board of commissioners’ option to bond up to $30 million, approved by voters alongside the SPLOST referendum. The BOC has not identified which projects will receive the bonded funds.
Reduction in funding looms large over state budget
Last month, researchers at Georgia State University estimated the state and local governments could lose up to $1.27 billion in previously anticipated sales tax collections due to the coronavirus pandemic and resulting economic recession. The reduction in funding has led to Georgia considering budget cuts of 14% to state departments.
The Georgia General Assembly postponed their annual legislative session in March due to the coronavirus pandemic and are scheduled to resume session later this month. The stateâ€™s FY 2021 budget must be adopted before the new fiscal year starts on July 1.