COLUMBIA — The revenue drought continues in Boone County.
With sales tax revenue stagnant and property tax rates expected to remain flat, Boone County’s budget for fiscal year 2011 looks dried up.
County Commissioner Karen Miller has been one of many county officials working to balance the budget, but what was predicted to be a year-long revenue shortfall in 2007 has turned into a four-year problem with no end in sight.
“Sales tax has been down each year for the last four years," Miller said. "It started to slide in 2007, in 2008 it came in negative and in 2009, it came in negative again. We just keep going down."
In 2007, sales tax revenue growth was estimated to increase 4 percent, but its actual growth was less than 1 percent. In 2008, sales tax growth was a negative 1.36 percent. And no growth in sales tax revenue is predicted for 2010 fiscal year, which ends Dec. 31.
Initial budget proposals for next year are due Sept. 1.
After this month's budget meeting with county auditor June Pitchford, Miller said revenue predictions still look bleak.
“We should have less revenue this year than last year,” Miller said.
The decline in sales tax revenue is a weighty problem for the county.
“Sales tax accounts for 75 percent of the public works budget and 100 percent of the law enforcement budget,” Miller said.
The drop in sales tax is partly attributed to the switch from a manufacturing-based economy to a service-based economy, according the auditor's website.
"Most services are exempt from sales tax, so when you go to the doctor or when you purchase services like at the mechanics, there will be sales tax on the parts but not on the service," Pitchford said.
Pitchford was quick to point out that despite the drop in revenue, the county has worked hard to avoid cutting positions.
“On average we don’t spend 100 percent of (budgeted) expenditures, we average about 94 percent,” Miller said.
The general fund is used to cover items like paying for equipment replacements, utilities and training, according to the auditor's website.
Even with three years of stagnant revenue, the county has held off dipping too far into the reserve well.
“We’ve been very frugal over the years and have built up a reserve fund,” Miller said.
The reserve fund is a pool of money used to maintain cash flow to avoid having to borrow money to pay bills, Pitchford said.
"We intentionally tried to build up those fund balances in the stronger years knowing that there could be periods of economic difficulty," she said. "That’s the period we're in now."
The county has had to make cuts, choosing to reduce advertising for new employees and cutting money from the downtown business district and historical society, rather than raise property taxes or sales taxes.
“We don’t think right now is a good time to raise taxes,” Miller said. In fact, the county has actually lowered property taxes, she said.
At the sheriff's office, Capt. Chad Martin of the county's service division said the department has managed to do alright, even with the cuts. He said the department is running their vehicles to higher mileage before they're replaced, and he hasn't seen new uniforms in a while. The real hit has been the lack of raises.
"More than half of our annual spending is in salaries and fringe benefits — health and dental — so there’s only so much that can be cut in spending before we have to look at cutting positions," Pitchford said. "I know that’s the last place anyone wants to go."
Jenifer Flink, executive director and curator of the Boone County Historical Society, said the amount of money the county was giving to the historical society was cut by more than half, putting the non-profit organization in a difficult position.
"I took it very seriously," Flink said. "We had to think, OK, what we could afford to do, how could we make the programs we offered revenue producing.
"It’s not fun and games. Our whole mission is to preserve the past for the future, but that means we have to make sure we’re around in the future."
Flink isn't the only one wondering what services she'll be able to offer the public.
Daren Campbell, interim director of the Boone County public works department, said he's not sure how the continued budget cuts will affect the services his department can offer, but he said the public might have to readjust expectations.
"The county does a great job on snow removal, and the residents like that," he said. "But it may come when we aren’t able to do the things we used to be able to do. Do you want snow removal, or do you want road repairs in the summer? That’s just a case in point."
County officials hope the revenue will pick back up in the future, making further cuts unnecessary. The problem is, no one knows when that time will come.
"This is a temporary strategy," Pitchford said, referring to the budget cuts. "I think what we’re all struggling with is we don’t know how long it will take until the revenue stream begins to pick up."
For 2011, at least, everyone is preparing for another dry season.