Knox County sales tax revenues are down, and local leaders have told their department heads to hold off on one-time expenses and to start tightening the purse strings.
County officials say they're not necessarily in a jam, but they are not expecting to reap a sizeable surplus next summer like they did for the past two years.
"We're prepared for (potential losses) and that's one thing I've continuously been warning folks against," Knox County Mayor Tim Burchett said. "It's why we've been tight with the taxpayers' money – for times just like this."
The mayor added that the county also has a "rainy day" fund of roughly $51 million – the most ever – but he doesn't expect to tap it.
"That would be for emergencies only," he said.
The county's general fund, which covers most of the day-to-day operations, closed the books on last fiscal year in August with about $7 million in surplus revenues.
The one-time money allowed officials to purchase a number of big ticket items, including new patrol cars, software upgrade and service contracts. Some employees also received raises and about $2 million was placed into the reserves.
The surplus was mostly a result of additional property and sales tax revenues, which were ahead of projections, as well as overall savings in the county's various departments. Officials said purchases tied to storm damage repairs accounted for much of the sales tax revenue bump.
In August 2012, the county's general fund received $8.7 million in surplus money, and officials set aside all but $2.8 million of it for senior transportation, an elementary school reading program, pension contributions, new technology and fuel.
As it stands, the county's general fund is currently trending at about $560,000 below projections. Officials initially budgeted for about $6.87 million. The trends cover revenues collected from July through October.
The county's engineering and public works general fund at this point has missed budget by about $400,000.
Officials initially projected a 2.5 percent growth – the same as the city – in sales tax revenues for the current fiscal year. The state projected an overall 3.5 percent increase.
Officials say they haven't quite yet hit the panic buttons and there's still time for improvement.
For example, Knox County Finance Director Chris Caldwell said the state on Jan. 1 will begin collecting sales taxes from online retail giant Amazon, a move that will add to the coffers.
Additionally, county property tax collections are up by about $3.1 million, or 7.3 percent, compared to this time last year.
Officials say that jump could help offset sales tax revenues, but they're not positive.
"You have to ask yourself is this more people paying early or are they paying more?" Caldwell said.
He added that the county typically gets a bump in property tax collections in December when it receives a large number of escrow payments tied to mortgages.
The county so far has collected $45.8 million in property taxes, and the county's finance office projected a 1.5 percent growth.
"We've got to proceed cautiously," Caldwell said, adding that he's asked senior directors to "pull back" from one-time expenses. "We've still got time."