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County commissioner candidates discuss tight budget

Thursday, July 31, 2008 | 10:02 p.m. CDT

COLUMBIA - With sales tax revenue down in the past few years, the next Boone County Southern District commissioner probably will face a full four-year term of tight budgets. Although the final calculations aren't in for this fiscal year, sales tax revenue numbers from the past few months don't bode well.

The county relies heavily on sales tax to support its annual budget, which is about $50 million per year. In fact, about 60 percent of county revenue comes from sales tax. And sales tax growth has been crucial to county government's ability to take on new initiatives. In the past, that growth has boomed, increasing 6 percent to 10 percent each year.

In 2007, however, taxable sales in the county declined from the previous year for the first time. For this year, the county has projected a 0.25 percent growth in sales tax revenue - much less than the 7.7 percent growth in 2005.

How to deal with stagnant revenue will be a major challenge for whomever is elected Southern District commissioner on Tuesday. The two candidates, Democrats Karen Miller and Sid Sullivan, agree the situation will require creative budgeting. When core costs such as fuel and utilities go up as they have, discretionary money for new equipment or personnel go down. County commissioners asked department heads to keep this in mind while preparing their proposed budgets for 2009.

Miller, the 16-year incumbent, said the next budget should focus more on maintenance rather than new projects.

"You just tighten your belt at this time and plan for the future," she said. "It's likely to be a little while before we're on the upswing again. I think we have to be very cautious, but we have to fund the requirements."

New personnel hires, employee raises and unnecessary custodial costs are the first things to cut back on, Miller said. She added that the county can try to make up for some of the loss by attracting more jobs. Industry boosts property tax income, and possibly sales tax revenue, depending on the type of business.

"Jobs will give people more discretionary dollars to spend, which ultimately improves our bottom line," Miller said.

In order to attract economic growth, Miller said the county must first get all major players - including Regional Economic Development Inc., the county, the city of Columbia, MU, chambers of commerce, Missouri CORE (Connecting Our Regional Economy) Partnership and the Mid-Missouri Regional Planning Commission - on the same page. Grant proposals and other strategies, she said, have more weight with everyone supporting them.

Miller also said she's not afraid to look into tax increment financing plans and the use of Chapter 100 bond incentives to attract business and industry, but she would do that only if it produces more jobs with benefits.

Sullivan agrees MU is a key factor in bringing business to Boone County. As for the tight budget, he said he would look closely at how the county does business and look for places to save. Projects with expensive outside contracts, for example, could be done cheaper in-house, he said. He'd also look at underused buildings and land as places the county can save.

Sullivan said he would consider tax increases only as a last resort.

"People are hurting," he said. "We can't just go to taxpayers and say let's raise taxes."

Lagging sales tax revenue also compromises the county's ability to keep pace with road maintenance and construction. County voters in November 2007 approved a 10-year extension of the half-cent sales tax for roads. Before and after that vote, however, commissioners said publicly that it wouldn't be enough to meet the needs.

Sullivan, however, said that major projects, such as roads, shouldn't be financed by sales tax and that he certainly would not support a higher sales tax. He noted that the county's sales tax is right at 8 percent and that it exceeds that amount in transportation development districts. That's the limit, he said, suggesting that higher sales taxes might drive shoppers away.

If the situation called for it, Sullivan said, he would prefer a higher property tax. Sales tax, he said, is harder on people with lower incomes, but property tax more evenly spreads the burden of paying for public projects. Costly road improvements, he said, could be financed by bonds paid back with property taxes.

"If there's no other option, we would have to make to the public the case and say: ‘This is what we need to continue on, and these are the services that we can't provide without the funds,'" Sullivan said.

Any plan involving property taxes would have to be well researched, well thought out and presented to the public with an honest explanation, he said.

Miller said she also would be hesitant to consider raising sales taxes any higher. Increasing property tax might be the answer, she said, but not when the economy and taxpayers are hurting. Bonds take a lot of time to research and work on, she said.

"I don't think it's the right time to put something on the ballot," she said. "I think citizens would say they'd rather stay where they are."

 


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