A Glimmer of Hope?

At a time where most economic news is not just bad, but VERY bad, I got an email from our budget office yesterday that gave a faint glimmer of hope.

When we finalized our budget for the year, we projected 4% declines in sales tax each of the first four months, and 2% declines each of the final eight months. Needless to say, that's a pretty conservative set of assumptions, and led to a tough budget. But being disciplined and realistic was necessary. How have things played out since?

In January, sales tax was off 3.28%--not good, but at least better than our four percent projection.

In February (reflecting the beginning of the holiday season--November sales), it was off 6.2%! Very scary. If that were to continue (along with other revenues that are declining), we will need to make major mid-year cuts

So we've been waiting anxiously for our March numbers. March reflects December sales--which because of the holidays, is our largest month. (Up to 33%, or several million dollars more, than the typical months). Another 6% hit or more would be devastating to our assumptions.

Well, the number came in yesterday . . . . . . and it was $6,946,346. This represented a 2.65% reduction from 2008. A decline, but a nice directional turnaround from February, and a healthy amount above our projection. And cumulatively, after three months, we remain just ahead of our projected 4% decline. (Although again, other sources of revenue remain off in that time).

While we can not spend dollars assuming anything but the most convervative scenarios, let's hope that this blip in the right direction was not an anomaly, but the beginning of a trend.