Members of the Boone County Commission addressed the county’s shrinking sales tax revenue as its primary concern during the first public hearing for the 2020 proposed budget Tuesday night.
The sales tax, which accounts for approximately 68% of the county’s total revenue, is expected to decline 1.75% from 2019. In her proposed budget, County Auditor June Pitchford estimated $47.6 million in sales tax revenue.
During the hearing at the Roger B. Wilson Boone County Government Center, Southern District Commissioner Fred Parry said the decline “has a significant impact on the services we’re able to provide the citizens of Boone County.”
Pitchford attributed the drop to untaxed online retail sales.
“As our community continues to grow and the demands for services continue to grow, that primary revenue source is being threatened by the changing landscape of retail activity in our country,” she said.
To compensate for lost revenue, Pitchford is proposing a 2-cent increase on property tax, which would generate about $600,000. That would raise the total property tax to 19 cents, still below the county’s authorized 31-cent maximum.
“Unlike the city, who is maxed out, we have kept our property taxes low to the tune of almost $4.5 million per year that we could be collecting, but we do not collect,” Parry said.
Another concern addressed was the potential loss of funding from the Boone Hospital Center lease which goes through Dec. 31.
The lease accounts for 3.5% of the county’s total revenue and is expected to generate $1.98 million in 2020.
“For a budget our size, the loss of an excess of $2 million is a substantial hit,” Northern District Commissioner Janet Thompson said.
The public comment portion of the hearing drew remarks from Larry Potterfield, CEO of MidwayUSA, an online retailer with a company based in Columbia.
Potterfield said his company started charging sales tax for customers nationwide in 2019 and offered to show interested commissioners where the money comes from and how it works.
As for spending, the proposed budget projects about $87.9 million in total expenditures, a 2% decrease from last year.
Pitchford’s budget allocates nearly $4.8 million, to be dispersed over several funds, for the replacement of essential technology, machinery and vehicles.
This includes a $1.07 million investment in new machinery and equipment for the Road and Bridge Fund and $1 million for radio network infrastructure improvements within the 9/11 Emergency Management Fund
Part of the replacement funding also includes law enforcement in-car video equipment, new and replacement emergency sirens and technology for the Assessor’s and Collector’s offices.
In addition, the proposed budget includes $322,000 in funding for salary increases and $875,000 for election activity, given 2020 is a presidential election year.
The commission will hold two more public hearings on the budget on Dec. 5 and Dec. 10.
Supervising editor is Kaleigh Feldkamp.