Sales tax collections for the first seven months of the fiscal year are more than $500,000 less than the same period of 2007-08, according to a report from the county trustee.

In January, County Trustee Brenda Radford submitted reports on sales tax collections and about property tax collections to the county mayor and the County Commission. As the 2009-10 budget season approaches, officials want to gauge revenues that will be coming into the county.

"We will have to be very cautious this year," said County Mayor Carolyn Bowers.

Sales tax revenues since the fiscal year began in July are down by $528,832 from the same period the previous fiscal year. It is important to note that monthly revenue figures are from two months prior because the collected sales taxes first goes to the state, which in turn, sends back Montgomery County's portion of local sales tax.

Radford said the numbers show a possible rebound is coming because the November figures increased by $128,973 from 2007 to 2008.

"The troops started returning in November, and people started getting ready for Christmas," she said. "We'll just have to wait and see what the February numbers (for December) show before we'll know."

Bowers is anxious to see the December numbers, which Radford expects during the second week of February.

"We always have higher (sales tax) revenues during the Christmas season, and with the troops returning, it may get better," Bowers said, adding that the lull in the local economy may not be realized until about March. "The question will be, are we going to continue to see the bump up? And some troops are leaving for Afghanistan, though not as many, but you have to wonder about how it will affect the local economy."

The downward trend in sales tax revenue has continued. According to Radford's report, for fiscal year 2007-08, local sales tax revenues were down $525,338 from the previous fiscal year. More help might come at the end of this fiscal year as sales tax revenues begin to trickle in from the building of Hemlock Semiconductor Corp.'s $1.2 billion plant here.

As part of an agreement with the state, taxes from the sale of construction materials will come back to Montgomery County, regardless of where they are purchased. Site preparation is expected to begin March 1. Bowers said details are not yet known of when and how — whether in a lump sum or monthly payments — the tax money will be distributed to the county.

The county also faces the unknown of just how much state revenues may be coming. Bowers and other county officials aren't expecting as much as usual, however, the federal economic stimulus package could help.

Some of the federal money will be available for "shovel-ready" projects, which won't directly help the county because most projects don't proceed until there is a method to pay for it, she said.

But because the Tennessee Department of Transportation will receive money for projects, it may be possible to take money from ready-to-go projects that are already funded locally, like building a new airport terminal, and use stimulus money for them. Thus, the earmarked state and local money could be shifted to other projects.

Sales tax is only a portion of the revenue ledger; property tax is the bulk of what pays the bills.

Collections surpass expectations

So far, slightly more than half of Montgomery County's property taxes have been collected, which is slightly above collections for the same time during past years.

"I was very happy that in these tough economic times, we are over 50 percent in collections for the first time in a 10-year period," Radford said.

Property tax notices are sent out on Oct. 1 and taxes are due by Feb. 28.

Radford's report shows that from October to December, a total of $39.28 million in property taxes had been collected. The amount is 50.4 percent of the 2008 property tax aggregate of $77.96 million, or the amount of taxes expected to be collected.

Over the past 10 years, collections for the same period were lowest in 1997 at 42.7 percent. During the past five years, the percentage has ranged from a 47 percent low in 2003 to just less than 49 percent in 2006, with all the other years at least 48 percent.

Radford said collections may be up because residents have several alternatives for paying their taxes, such as paying at 29 different banks in the county, paying online or paying at one of the satellite collection sites at volunteer fire stations during January.

One more satellite collection will be held from 9 a.m. to 3 p.m. Feb. 6 at the old Cumberland Heights school.

Mark Hicks covers county and school governments and can be reached at 245-0200.