Tax increase proposed during joint session
A joint session on Sept. 2 between the Pulaski County commissioners and council led to the hiring of a technology manager and to begin adopting an income tax.
The county council wanted to give a 10-percent raise to all county employees but after the numbers were calculated and it was determined that about $2 million needs to be cut from the budget, it doesn’t appear to be possible.
Councilman Doug Roth calculated the proposed salary increases to reflect longevity and a salary matrix. The county highway department and the sheriff’s office would have the largest increases.
Of the proposed county general budget that totaled $8,462,250, the council reviewed and cut about $1,590,116. County auditor Shelia Garling said the Department of Local Government Finance (DLGF) has advised the county to cut as close to $2 million as possible.
Garling said the problem, according to the DLGF, is the county is “spending more than we are taking in. This year we know what we have coming in and we know what we having going out.”
As council members are looking for different options to cut an additional $410,000, council president Jay Sullivan suggested implementing a Local Option Income Tax (LOIT) that can be used for public safety costs.
He said the reason for the tax is “they have been cutting our tax revenue significantly over the last five years.”
Garling said the tax could bring in an additional $600,000 per year that would be divided with other taxing units. “The state will tell us what we have to disperse out — how much we have to disperse out.”
The tax could be in effect on Jan. 1, 2016, but Garling wasn’t sure when the county would receive the funding.
“The projection for coming in, money-wise, the county general for next year is $1.685165. That’s the projected amount that we will receive next year from the state and from fees that we collect,” Garling said. “So see, we’re talking a $6 million budget and I’m only going to receive $1.6.” That does not include property taxes but other fees.
Councilman Mike Tiede asked if the county could use the Rainy Day Fund to cover the $410,000, if the county doesn’t receive the LOIT funding in 2016. He said he’s not in favor of a new tax but there might not be another option.
Garling said the $400,000 for the liability insurance could be taken from the Rainy Day Fund, instead of trying to cut several line items to find the $400,000. There is more than $800,000 in the Rainy Day Fund.
Of the proposed budgets, the sheriff’s office budget became a target of discussion. For the last several months, sheriff Jeff Richwine has been talking with the council about a wage increase for the sheriff’s office including deputies, jailers and dispatchers. The increase is based on a matrix and reflects the longevity of employees. The increase is estimated to cost about $60,000.
When Garling calculated the sheriff’s budget it appeared that the department has cut more than $300,000 from the proposed/advertised budget. The $300,000 cut that Garling mentioned didn’t include a 10-percent wage increase or the increase of the proposed wage matrix. It did include moving two positions, a dispatcher and jailer, into different accounts. The cut also included funding being moved from a pension fund into the salaries.
Sullivan said additional funding would need to be cut from the sheriff’s budget to cover the wage matrix increase. It was suggested that the sheriff cut an additional $60,000 to cover the wage increase.
Richwine said $70,000 in funding is available if the department doesn’t purchase two new vehicles.
As discussion continued, council members said they would still like to see if the proposed wage matrix or a raise could be given. If employees of the highway department are given a raise, some additional funding may have to be cut from that budget which is not the same as the county general budget.
Garling reminded the council that each year, the county receives less funding so giving employees a raise may be funded for 2016 but there may not be enough in the budget to cover those same wages in 2017.
“What we are doing is getting something consistent and so if the state continues to cut then we will have to cut. And if it means that we have to cut positions — they did it how many years ago,” Powers said. “Understand that this committee that we had isn’t trying to give everybody raises. We are trying to come up with consistency so that things will continue on this pattern. It’s a matrix that can continue for years and years.”
Sullivan said the new tax should help this situation.
Roth said a majority of the wages would freeze with the matrix. “I think that wages have gotten out of control.”
Council members approved a motion to begin the adoption of Local Option Income Tax for public safety of .0025 percent. The motion was opposed by Doug Roth.
A motion was approved to borrow the $410,000 from the Rainy Day Fund to cover the needed cuts unless the LOIT funding is available in 2016. Linda Powers abstained from the vote because she was late. Roth opposed it.
A public hearing regarding the budget will be held on Monday, Sept. 14, during the council meeting.
In other business:
• Pulaski County Commissioners Larry Brady and Bud Krohn Jr. approved to hire R.B. Walters as the county technology manager. Brady said there were five applicants and two were top prospects.