Forget Fido, the local option sales tax just might have become a county property owner’s best friend here.

The penny sales tax is projected to generate $1.25 million for the county in fiscal year 2010-2011. That money would have otherwise come out of county homeowners’ wallets.

Vehicle owners will save another $120,000 in property tax relief as a result of the 1-cent sales tax, the county estimates during this fiscal year.

According to state law, 71 percent of the money generated by the sales tax goes to reduce local governments’ portion of homeowner property taxes.

Cherokee County Assistant Administrator Holland Belue said the local option sales tax is a win-win for property owners and local governments.

“(Local option sales tax) is a very good thing,” Belue said. “It provides a tax credit for the property owners on their tax bill.”

It also ensures the county is receiving much-needed revenue, Belue said.

The local option sales tax has gone on the books at a time when local government revenues are decreasing. According to the South Carolina Association of Counties, state aid to subdivisions has dropped about 18 percent since fiscal year 2008 and other revenue sources, such as the Accommodations Tax, have declined by a percentage point.

Of the counties that responded to a University of South Carolina Institute for Public Service and Policy Research survey, twothirds had a decrease in their general fund budget for fiscal year 2010.

Cherokee County’s operating budget, however, remained unchanged from fiscal year 2009 to fiscal year 2010.

The county did follow a trend of dipping into their “rainy day fund,” or fund balance, to offset budget shortfalls caused by dwindling revenues. Sixty-seven percent of counties in the survey used a portion of their fund balance in 2009.

Last year, the county transferred $1.2 million from its fund balance and raided another $875,817 from that same source in the current fiscal year.

According to the treasurer’s office, the county’s fund balance totalled $10,843,823 as of June 1, 2009.