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3 <br /> stream will continue to be closely monitored for fiscal impacts. Unlike sales tax which has a three-month <br /> lag, motor vehicle (revenue to economic activity) is one month allowing for assessing impacts to be <br /> timely monitored. <br /> • Sales tax revenues are 64.2% of the budget compared to 62.5% the prior fiscal year. The Hold Harmless <br /> sales tax revenues was budgeted at $4.5 million in FY 2024-25. This represented a budgeted decline of <br /> $1.2 million from the prior year's budget. As noted in the prior year's third quarter report, increased <br /> State Medicaid expenditures in turn eroded the County revenue share. The FY 2024 Hold Harmless <br /> amount was $4.8 million. The FY 2024-25 budgeted amount of$4.8 million should be met as it <br /> accounted for the increased State Medicaid expense increases. The North Carolina Department of <br /> Revenue will make final adjustments to the Hold Harmless in mid-August. Another sales tax risk factor <br /> is refunds to taxpayers that erroneously paid sales tax. Articles 39, 40 and 42 are projected declines <br /> also due to higher than anticipated sales tax refunds. Nonprofits and overpayments are the two <br /> primary factors. The three-month lag in sales tax collection is a key factor in monitoring economic <br /> correlation; the County will receive its June sales activity on or by September 20, 2025, and this <br /> generally is the last transaction posted to the County's books for FY 2024-25. <br /> • Intergovernmental revenues are 53.7% of budgeted revenues as compared to 55.5%the prior fiscal <br /> year. As noted on the first page, none of these revenues have received any Federal or State <br /> cancellation notice. The percentage received to date has historically trailed the budget through the <br /> third quarter as noted in the table below: <br /> Table 1: Federal and State Grants Trend <br /> Fiscal Year Intergovernmental Revenue <br /> Third Quarter <br /> 2024-25 53.7% <br /> 2023-24 55.5% <br /> 2022-23 50.3% <br /> 2021-22 53.2% <br /> 2020-21 59.7% <br /> 2019-20 50.6% <br /> The intergovernmental revenue trend above is attributed to the historical timing lag for claim <br /> reimbursements. With the outset of the new Federal Administration, County departments began <br /> submitting reimbursements as soon as practical under their Federal and State program guidelines. <br /> Through the third quarter of FY 2024-25 $15 million of Federal grant spending has occurred which <br /> 3 <br />