SALISBURY – A shortfall in estimated Wicomico County jobs has created a shortfall in anticipated income tax revenue that county officials hope to fill by pulling funds from the Roads Department.
According to Director of Finance Andy Mackel, income tax revenue estimates are based on a formula derived from the statistical relationship between the number of county citizens who are employed during the calendar year and the income tax receipts distributed to the county during the succeeding full fiscal year. For example, employment levels in calendar year 2013 will determine revenue in fiscal year 2015. Eighty-one percent of the change in income tax revenue is explained by changes in employment, Mackel said.
The income tax revenue estimate for FY14 was constructed last year in February. At that time, employment growth had been strong for 26 consecutive months at 2 percent per year for a total of 2,076 jobs. The upward trend appeared to be moderating, so the FY14 growth was estimated at 1.1 percent for a total increase of 540 jobs, which mirrored the growth rate between the years 2000 and 2003.