Agenda - 03-05-2009 - 1 - Laserfiche WebLink

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2 In December 2008, staff requested reimbursement of PSBF monies from the State totaling $1,095,278. To date, the State has reimbursed $717,750 of the request leaving $377,528 unpaid. With regard to Lottery proceeds, the County has requested reimbursement totaling $2,298,202 and received $1,286,000 leaving $1,012,202 unpaid by the State. The State Budget Office is still working through the withholding details. While there is a possibility the State will pay the outstanding balances, there appears to be an even stronger possibility the State will choose not to pay the amounts due the County. • During the conference call mentioned earlier, the NCACC advised staff to budget conservatively and not count on Public School Building Fund monies in fiscal year 2009-10 and possibly beyond. This loss equates to $1.4 million revenue reduction in the County's General Fund — the equivalent of about 1 cent on the tax rate. Other rumored withholdings include E-911 revenues, beer and wine taxes, and "hold harmless" monies promised to counties as part of the Medicaid Relief/Sales Tax Swap approved by the General Assembly two years ago. Again, little is known about the possible withholdings. However, it is not unprecedented for the State to keep revenues owed to local governments during difficult financial times. This has occurred on a number of occasions in past years and has included permanent withholding of intangibles and inventory taxes and intermittent Public School Building Fund monies. In addition to the loss of revenues received from the State, the depressed economy brings decreases in consumer spending and downturns in construction. At this time, staff projects the losses in sales taxes, property transfers, and permit related revenues might range between $1.5 to $2.5 million for fiscal year 2009-10 — the equivalent of 1 to 2 cents on the tax rate. Equally important in assessing the fiscal condition are the County's appropriations. Appropriation Update - Record numbers of people are experiencing reductions in work hours and lay-offs. As a result, the County's safety net departments such as Social Services, Health, and Housing are experiencing significant increases in requests for services to meet basic needs of food, housing, utilities, medical care and transportation. These increased pressures will result in the need for more money to provide our residents' necessities. In addition to increased demands for services, new County facilities have either recently opened or will be coming on line in the upcoming year. Preliminary cost projections associated with these facilities range from $2.5 to $3 million. Since much of the news about potential withholdings is late breaking, staff has not had adequate time at the publishing of this agenda package to analyze the full impact of revenue losses and provide as accurate a picture as possible. Staff