Knox County officials are projecting a $2.7 million sales tax deficit by the end of the 2013 fiscal year, according to Finance Director Chris Caldwell.
He says a recent state report shows sales tax collections declined about $945,000 in July 2012 when compared to July 2011.
Part of the decline can be attributed to a one time spending bump in July while contractors and homeowners bought supplies in wake of last year's hail storms.
But he says they're still expecting overall sales tax numbers to be down, though he says there is hope the county can make up for the shortfall in other areas.
Commissioner Mike Hammond also shared a report on Monday that called it a "slow summer" for Knox County.
He says the report cited a 2,011 decline in hotel and motel bookings for the January-July when compared to a similar time last year.
Caldwell called the numbers "a little concerning" but said there's "not a reason to panic yet."
The news contrasted with a continuing discussion amongst commission about how to spend a project FY 2012 budget surplus.
Caldwell explained to commissioners the genesis of some unanticipated money.
He says they collected $1.3 million more than they expected from Halls income tax revenue and were able to abstain from making a $750,000 contribution to the health insurance fund.
Those factors, coupled with an unforeseen fuel budget savings from the Knox County Sheriff's office left the county with some extra cash.
But Caldwell says the next fiscal year may not end similarly.
The finance department is projecting an approximate general fund deficit of $460,000, including the sales tax figures.
In an effort to stay abreast of the county's financial status, commissioners officially requested Caldwell prepare a quarterly report to update them on the status of county spending and finances.