During his budget proposal to the Macon County Board of Commissioners Tuesday night, County Manager Derek Roland informed commissioners that the local economy did not struggle during the COVID19 Pandemic as expected and in fact, reported the largest growth in county history.
“The successful vaccination effort has resulted in financial and economic forecasts continuing to improve in North Carolina and many states across the US for FY 22’.,” said Roland. “On March 11, 2021, Moody’s Investor Services upgraded the economic outlook for local government entities from negative to stable. The upgraded economic outlook comes as no surprise to many NC counties who like Macon, have continued to experience unanticipated revenue growth for the majority of FY 21’.”
At the time of Roland’s budget message, North Carolina like many states across the country, appears to be “turning the corner” with respect to the COVID-19 Pandemic. On May 14, 2021 the Governor’s Office reported that 46% of North Carolinians 18 years and older were fully vaccinated and nearly 51% had received their first shot. The statewide vaccination effort, combined with a decrease in daily cases, deaths and hospitalizations has resulted in relaxation of strict policy measures previously enacted to slow the spread of COVID-19. On May 13, 2021 the Center for Disease Control, issued guidance that fully vaccinated individuals can safely do most activities without wearing a mask or social distancing.
Following this guidance the State of North Carolina removed the indoor mask mandate for most settings and lifted all mass gathering limits and social distancing requirements.
“Pandemic management will remain vital to a continued recovery, given the relationship between the coronavirus and economic performance,” said Roland. “While the push for mass vaccination is expected to support continued recovery, new outbreaks or new strains of the virus could potentially lead to economic contraction thereby weakening local government revenues. Conversely, if the virus remains contained and economic growth continues sources such as Moody’s point to local government revenues materially exceeding pre-pandemic highs.”
At an estimated $10,526,046 or 19% of total revenue in FY 22’, sales tax revenue will increase by $2,462,105 over the current fiscal year original budget amount in Macon County’s budget. In a recent survey performed by the North Carolina Association of County Commissioners to which 75 percent of North Carolina counties responded, estimates show the average sales tax growth in North Carolina for FY 21’ to be 10% over prior year actuals.
“The survey results mirror guidance released by the North Carolina Office of State Budget Management and the North Carolina General Assembly’s Fiscal Research Division, both of which estimate 10.3% growth for North Carolina Counties in FY 21’ sales tax receipts,” said Roland. “Through January of FY21’ Macon County sales tax collections was up 19.4% over FY 20’ actuals. In applying a projected increase of 10% over prior year actuals to each of the remaining months (February-June) we are projecting to finish FY 21’ at 15.8% or $1,393,956 above FY 20’ actuals. Moving forward into FY 22’ we will budget 3% growth on the projected $10,219,832 to end FY 21’ generating an additional $306,214 in sales tax revenue in FY 22’.”