A troubling dip in sales tax revenues may force county government to use a bit more of its reserves to fund items in the 2020 budget. But county Budget Director Scott Neufeld told county commissioners Thursday that the spending of reserves would not be big enough to be outside the realm of acceptable and should not affect the county’s bond rating.
Neufeld was the second government staffer to express concerns about lagging sales tax revenues in the first two quarters of this year and its effect on the budgets that are being written this spring. Earlier this week Overland Park officials also discussed the slow sales and use tax revenues that seem to be a statewide phenomenon.
Neufeld presented the sales tax information as county commissioners prepared to approve their maximum spending for next year. He said sales tax in the county taxing districts is down $1.5 million. Some of that can be attributed to bad weather and a slowdown in automobile sales and other expensive items, he said.
More puzzling is the fact that the use tax, which is paid off internet purchases, is also lagging, he said. Since internet sales are not typically affected by weather, he said, economic experts are still trying to find an explanation.
Plans to move forward with funding for priority items
Nevertheless, the county will still be able to fund the priority items commissioners have discussed the past few weeks without changing the static tax rate, he said.
Commissioners approved a maximum spending limit of $1.25 billion for the coming year, of which $322 million is reserves. They set a public hearing for 7 p.m. July 29.
The approval of budget figures this week was a statutory requirement that is a step toward the final budget Aug. 8. From this point, the commission can still change or reduce the budget but cannot increase spending.
The maximum budget is close to what was recommended by County Manager Penny Postoak Ferguson. It includes a static mill levy from the current year of 26.013 mills, with 19.024 mills for the county taxing district, 3.901 mills for the library district and 3.088 mills for the park and recreation district.
Only relatively small changes in department spending have been made so far from the county manager budget. Commissioners plan to add money for supplemental pay for four magistrates and to add two case workers to the mental health department.
One change that will be felt by the cities is the decision to increase the amount the county charges cities to send arrestees to jail. Commissioners have proposed increasing the fee from the current $35 per day to $50 a day.
Commissioners briefly discussed some thoughts on the budget. Commissioner Mike Brown noted that the county budget has been increasing faster over the past decade than the consumer price index. “I get that we’re trying to be in front, we’re trying to make sure we take care of everyone. I would submit that we can’t be all things to all people,” he said.
However some other commissioners said the consumer price index is not necessarily the best comparison. Chairman Ed Eilert said the population and demand for services has increased, but the number of county employees is still lower than it was 10 years ago. Health care costs also have gone up in a way not comparable with the CPI, he said.
Commissioner Michael Ashcraft noted that the vote only caps the maximum spending, and that there is will still be time through the end of July to make other budget changes as long as they don’t increase spending. “We will have a few weeks to hammer our heads against the wall on this and maybe some of those issues will be addressed,” he said.