Agenda - 05-30-2013 - 2 - Laserfiche WebLink

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Revenue Comments - continued Sales Taxes All Other 91% Over the past three fiscal years, Sales Tax revenues have been uncertain and unpredictable due to both the recession of 2009 and the Medicaid /Sales tax swap with the State Of North Carolina. The Medicaid/ Sales tax swap was phased in from FY2008 -09 through FY 2009 -10. The new funding formulas, including a hold harmless allowance for the Towns, have now been in place for the past two fiscal years and revenue forecasting has become more predictable. Sales Tax revenues have stabilized since the 2009 recession and are now growing. Article 39 One Cent - This is the original 1 percent local option sales tax levied by the County, and is collected and distributed by the State based on local retail sales. Article 40 Half -Cent (1st Half Cent) - Enacted by the County in late 1984, the State collects this revenue and returns it to local governments on a per capita basis. This revenue source is earmarked for both County and School capital projects and debt service. Article 42 Half -Cent (Additional Half Cent) - The tax in this category is similar to the first half cent tax. The General Assembly authorized it in 1986. As with the Article 40 Sales tax, this tax is used to finance school and County capital projects, including debt service payment. There was a change in calculating Article 42 proceeds from a per capita to a point of sale formula during FY 2010 -11. Article 44 Half Cent (Third Half Cent) — Authorized by the General Assembly effective December 1, 2002, this tax replaced the reimbursements the State withheld from counties and cities, beginning in FY 2001 -02. In FY 2007 -08, the General Assembly enacted the Medicaid Relief /Sales Tax Swap (House Bill 1473), which phased out the County's share of Medicaid expenditures over a three year period, from FY 2007 -08 through FY 2009 -10. In exchange, the County ceded Article 44 sales tax to the State beginning October 1, 2009. Article 46 One - Quarter Cent — The Article 46 One - Quarter Cent (1/4 cent) County Sales and Use Tax was approved by Orange County voters in the November 2011 election, and became effective April 1, 2012. A Special Revenue Fund, outside of the General Fund, has been established to receive and account for the One - Quarter Cent (1/4 cent) Sales and Use Tax proceeds. For more information, please refer to the Article 46 Sales Tax section in this document, located after the department budgets. Hold Harmless Provision — Based on the Medicaid Relief /Sales Tax Swap legislation, House Bill 1473 includes a "hold harmless" provision that guarantees Orange County will receive at least $500,000 in Medicaid relief, reportedly in perpetuity. WA