COLUMBIA — The Boone County Commission voted unanimously not to increase property taxes this year, opting instead to use reserve money to cover a projected shortfall for 2009. But county officials cautioned they could face the same decision next year if sales tax revenue continues to decline.
The commission set in motion the process to raise property taxes, including a public hearing on Tuesday about the proposal, to cover a projected $1.3 million budget gap for the fiscal year that ends Dec. 31. Commissioners said then that the increase could be as high as 5 cents per $100 of assessed value but probably would be lower.
But new numbers presented at the meeting Tuesday projected a shortfall of only $512,000. Boone County Clerk Wendy Noren and Treasurer Kay Murray said at a commission meeting today that amount is small enough to cover with reserve money.
Noren said the reserve fund balance of $6.9 million exceeds the amount recommended in county policy by more than $2 million. The county's policy has been to maintain a fund balance equal to 15 percent to 20 percent of its annual budget, Noren said. By contrast, the projected $6.5 million reserve balance at the end of the year would be 28.2 percent.
The county has justified adding to its reserve, Noren said, by saying the money is being saved for a rainy day.
"I think that rainy day is here," she said.
Noren said a tax increase would be a public relations nightmare.
"I think this is an opportunity to show that we are different from other governmental entities," she said. "We have the opportunity to show that Boone County government, unlike most governments, has had sound fiscal policy."
The shortfall is mostly the result of lagging sales tax revenue, which is projected to decline by 3 percent this year. It would be the second year in a row that sales tax have declined, and commissioners worried the trend could continue.
"I think we are manageable for this year," Southern District Commissioner Karen Miller said. "I'm just really worried about next year."
Miller said next year's budget would likely include an increased property tax, but if the county's financial position improves, the commissioners could choose not to enact it.
At Tuesday's hearing, a handful of residents told the commission the increase would hit hard in this economic climate. They said the county could further cut spending before raising taxes.
Commissioners said the county already has significantly cut spending by leaving staff positions vacant, deferring equipment replacement and looking for ways to be more efficient. Other costs, such as fuel purchases, were lower than budgeted.
Presiding Commissioner Ken Pearson said he thinks the county is approaching the end of its "easy" cuts that won't affect service. Pearson also said he worries the state government will cut appropriations to the county next year, which could further hurt the county's bottom line.
Murray said the county has spent its money responsibly to maintain a high level of service.
"It's very painful to cut back," she said, but she added that making the cuts has been a good lesson for county leaders.
"I like the team effort and the discipline of trying to keep our expenditures down," she said.
The vote maintains the current property tax levies at 12 cents per $100 of assessed value for the general fund and 4.75 cents per $100 of assessed value for the common road and bridge fund. The maximum legal rate for the general fund is 22 cents, and the maximum rate for the road and bridge fund is 5 cents.