HomeMy WebLinkAboutC.054.93010_0672 (2)Finance Director Susan Blumenstein then gave the following information about the
revenue shortages.
"The counq, receives sales tax distributions on a quarterly basis. The
distribution received in November was for the July, August, and September retail
sales. On February 15, 2002, the distributions for October, November and
December were received. Recently, a notice came from the League of
Municipalities indicating the state had issued some numbers that said the
distribution would be about seven -and -a -half percent less than it was at this same
point in time last ,year. There was no growth at all, and actually, there was a five
percent slide. Today, I received the actual figures and the two one-half cent sales
taxes, which are distributed on a population basis, were 7,75%, less than what we
received last year. The one percent sales tax which is received on a point-of-sale
basis was 7.1390 less than this same point in time last year. However, ori the one
percent sales tae, the first two quarters did net a 5% increase over the prior year.
1 feel that for the rest of this year, we'll be slightly under budget in the one percent
sales taxes, or about $66,550. However, on the two one-half cent sales taxes, it's
estimated the next distribution, to be received in mid-May for the first quarter of
2002, will be approximately three percent less than this same period last year, and
then the final quarter, with the money to be received on August 15, a two and half
percent decrease will occur over the prior year. Although retail sales statewide
are expected to pick up, it's expected there will be decreases in the taxes. Net
effect, I believe our sales taxes this year will be $1,127,626 less than budget.
"The other piece of information, presented at the briefing, outlined two
plaits on how to deal with the changes. Sales taxes estimated to come under
budget were $1,127,616 lower than anticipated. The state Inas withheld $786.238
in inventory taxes, $330,000 in beer B wine taxes, and withheld $103,995 in the
elderly homestead exemption. We expect to come in $470,030 short in ad valorem
taxes due to the personal property tax valuation that has not had as much growth.
Growth has occurred, but some industries have closed. Interest ori investments
will be down about $540,000. On a good investment, the current yield is ahout
1.8' %'� -- public funds are a little less than open market. The rates are bad now.
The Public School Capital Fund will be less by $327,825. This is due to the state
setting its estimates too high for the next ten-year period. Other net decreases that
will occur are $337,664. This gives a total decrease in revenues -- what we do not
expect to receive -- of $4,023,378. This leaves the net estimated revenues at
$102,526,102.
"Two plans (A d, B) have been presented to deal with the situation. On
Plan A, on the expenditure side, generally the county spends about 97% of the
budget. This would leave $3,113,030 or the remaining 3%. We would reduce the
transfer to the Capital Reserve Fund ($2,500,000 was budgeted) by $910,348. It
would still be necessary to use $1,463,206 from fiord balance to balance the
budget. This would drop the fund balance to $10,295,925 or slightly over telt
percent of the adjusted expenditure budget. This would result in lifting die freeze
on certain general fund capital outlay iters that were frozen by the commissioners
last July of $181,800. We would amend the operating transfer to the Capital
Reserve Fund to $1,589,651. This would be designated for the library project
making availahle $4,474.652.
"Plan B would "(,suit in the same amour of revenues; however, 30-11, of the
1983 sales tax is restricted for school capital. The 1986 sales tax has 60%
restricted for school capital, so in our budget estimates we appropriated those
restricted sales tax revenues for school capital. Plan B, instead of the county
taking the entire /tit, would reduce the capital outlay appropriation to the schools
by the same amount of restricted sales taxes that we do not expect to receive or
$465,517. That's the restricted portion of the two one-half cent sales taxes. We
would also expect not to spend three percent of our operating budge. This way
would reduce our transfer to the capital reserve by only $44,831. The $2.5 million
operating transfer, originally budgeted to go to capital reserve, would decrease to