Another Go at the Sales Tax on Tuesday
March 7, 2014
The proposal for a county sales tax increase is back on the agenda, Tuesday March 11, postponed from the December 17 meeting by a 4-3 vote. (See Item 5G1.)
In December, there was consensus that the proposal was a “potpourri” or grab-bag of small projects lumped togther to utilize the $110M a year that a .5% increase would bring. It’s reincarnation is still a grab-bag of small projects, but they are limited to infrastructure and spending for Parks and Recreation was removed. Since the total hasn’t changed, the net effect is to add MORE road projects to the proposal. The largest of these is a line item for “resurfacing – 7 years @ $12M/year” for $84M.
A noteworthy aspect of this proposal coming out of George Webb’s Engineering and Public Works Department, is the condition that 40% ($44M per year) is to be shared with the municipalities for wherever they would like to spend it. However allocated, this would represent a sizeable amount relative to most city, town and village budgets. (Note- this sharing is required by the authorizing statute for sales tax surcharges).
As for Engineering and Public Works itself, the $66M / year retained in this proposal would more than double their $53M current budget.
It should be said that road projects have gotten more of their share of cuts over the last few budget cycles, as the enormous half a $Billion (with a “B”) Sheriff’s budget gobbles up an ever larger percentage of the county tax revenues. Adding $66M to E&PW from a different revenue source would seem to be a questionable action.
The December proposal was allocated differently – $44M for the School District, $40M for the county (including Parks and Recreation), and $26M for the municipalities. The school district did not want to play in this though – rumor has it that a separate sales tax increase will be brought forward by those folks. In the revamped proposal, E&PW decided to just keep all the money for themselves.
This proposal should be considered within the overall background of county finances, not in isolation. Property Appraiser Gary Nikolits is projecting a 6-7% increase in taxable valuations this year. Even with some reduction in millage (which we think is justified), there should be sufficient property tax revenue to start addressing infrastructure maintenance that has been deferred over the last few years. When you build a road, you should plan to maintain it – this is one of the natural and expected functions of government. That spending was diverted to other priorities is a management failing – not a justification for a new tax.
A serious proposal for a sales tax hike could be justified if it was revenue neutral – ie. offset the $110M in new revenue with an equal reduction in ad-valorem tax. That is not what is being proposed. Instead, it is still George Webb’s “wish list” of work he’d like to do but was unable to justify in the normal budget process.
If this were actually to get on the ballot in November, particularly next to a School System increase (“it’s for the children!”) and the re-authorization of the taxing district for the Children’s Services Council (“It’s also for the children!”), then a betting man would wager that it will go down in flames. Perhaps they all will, as the taxpayers do not sense that their money is spent wisely today.