Davidson County manager presents conservative FY2026 revenue plan, highlights slowing sales-tax growth and steady property collections

County Manager Casey opened the county——budget briefing on March 6 by telling the Board of Commissioners that staff is building a conservative FY2026 general-fund budget centered on steady property-tax receipts, slower sales-tax growth and careful use of fund balance. Casey said property valuations have roughly doubled over 20 years and remain the most predictable revenue source, while sales-tax growth has slowed from double-digit gains to roughly 1.5—to—2% recently. "We're not growing at the double-digit rate sales tax wise that we were just a few years ago," Casey said.

The county manager walked commissioners through a set of dashboards staff uses to monitor revenue and salary risk in near-real time. He described the dashboards as a tool to spot trends early and to prompt corrective action if collections or payrolls drift off plan. The presentation highlighted a roughly $16—million property-tax "slack" in the current year that the county has moved into capital reserves by design and an estimated additional $5.5—million of long-term debt capacity that would appear as debt service falls off the schedule.

County Treasurer Tim and tax staff were credited for improving collection rates; Casey cited a 3.9% year-over-year growth in property tax collections and noted that most property taxes are collected by October each year. He also flagged a modest slowdown in sales-tax receipts entering the current fiscal year: the county recorded an 11% jump from 2022 to 2023 but only about 3% from 2023 to 2024, and staff observed a half-point dip in a recent month when comparing December-to-December figures.

Casey recommended a conservative approach: budget revenues low and budget operating expenses more aggressively to preserve flexibility if federal or state funding changes (he specifically noted potential uncertainty in Medicaid-related intergovernmental revenues). He proposed a target fund balance at or above 50% of the general fund and said his budget attempts to return the county toward the mid-50s percentage by next year. "I don't want to watch it go down," Casey said of the county's fund balance policy.

On the expense side, salary and benefits remain the largest drivers of the general fund. Casey noted a current general-fund vacancy rate of about 9.5% (roughly 80—vacant positions) and estimated vacancy-related savings near $1.4—million year to date; he cautioned that if large departments fill vacancies quickly those savings will shrink and the payroll line will climb toward budget. He also described a $2.2—million vacancy cushion built into the FY2026 base personnel assumptions to reflect historically expected hiring patterns.

Casey told the board that interest income has been an important but variable revenue source: investment earnings rose in recent years when rates were higher and can fall quickly if the Federal Reserve cuts rates. He proposed a conservative $2.6—million interest estimate for next year rather than assuming elevated yields persist.

Why it matters: the county is preparing a baseline budget that aims to protect core services while setting aside growth for long-term capital projects. The manager emphasized early detection of collection and payroll trends to avoid midyear cuts.

Casey closed by urging commissioners to prioritize three financial goals as staff finalizes the budget: hold the tax rate at or below the current rate, maintain fund balance near 50% of the general fund, and continue to support pay increases and major capital priorities in a measured way. The board asked clarifying questions and directed staff to continue the budget process and public review schedule.