Area towns, counties brace for impact of sales tax losses

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October 27, 2009

Anonymous The Joplin Globe Tue Oct 27, 2009, 08:34 PM CDT

By Debby Woodin

dwoodin@joplinglobe.com

Cities and counties are pinched from a year of sales tax decline, some more than others, but they are trying to keep residents from feeling the pain too much by spending reserves, cutting nonessential services and trimming employee pay.

Joplin, down about 5 percent, or $1.6 million, on its combined five city sales taxes, began belt tightening early in the year when City Manager Mark Rohr directed department heads to cut their department budgets by 2 percent. Later in the year, he took additional steps to curb city spending.

Neosho has had to take more serious steps to meet the challenge of declining revenue. There were layoffs early this month, the first month of the town’s fiscal year, and pay cuts for city employees.

Neosho residents will see the budget strain in some reduced services, most markedly in street work and cancellation of the city’s usually routine leaf-pickup program, said Bob Blackwood, the city’s finance director.

Those actions worry some residents.

“I think the employees are doing the best they can in a bad situation, a bad economy,” said Neosho resident Rhonda Warren, who serves as a volunteer on the city’s parks advisory board. “I would say that it would be much better if residents had more input in what services are reduced or discontinued in times like this. I don’t think those decisions should just be made by employees.”

Though employees of Jasper County have not had to take pay cuts, there may be little or no money for raises for next year, though the county is waiting on all the budget figures to come in and has not made a final decision, said Richard Webster, the county auditor. He said he does not see that any services to residents will be cut.

Newton County officials say they will not have to cut services either, but the county will dip into contingency money it has built into its budget that is reserved for covering emergencies to cover its sales tax shortfall.

Joplin

Joplin’s fiscal year ends Saturday, and it has received its last sales tax payment of that fiscal year.

Reports generated by the city’s finance department show that the year’s receipts for the 1-cent general fund tax were $11.74 million, down from $12.34 million for the previous fiscal year. The city had projected receipts of $12.6 million, an increase of 2 percent over 2008’s total.

Joplin was luckier than some, said city Finance Director Leslie Jones.

“We still provided all the services to residents,” she said. “We didn’t cut services and we didn’t lay off people, so we didn’t have to do what others had to do.”

But when sales tax revenues took a dip the first quarter of the year, the city manager responded in March with the 2 percent budget reductions. In July, the city manager took additional steps by ordering a freeze in travel unless a trip was mandatory for grants or licensing, froze hiring unless he authorized a position to be filled, and told the city staff to limit buying capital items unless it would cost the city more not to make a purchase, such as for car repairs.

Jones said the city’s cost-saving measures were renewed this month when the new budget went into effect as a result of the year-end figures on the tax collections.

Joplin also received some timely windfalls to help take up the slack.

“Even though we took the hit on sales tax, we had some other fees like a cell phone franchise tax settlement and others that couldn’t have happened at a better time,” Jones said. “We had some other things on revenue that helped,” including a $318,000 rebate on health insurance premiums. The cell phone settlement payment was $2.175 million.

City officials hope the sales tax numbers will go the other way soon.

“From what I hear, we, as a nation, think we’ve hit bottom and we’re going to start rebounding, and it’s just a matter of when Joplin will start rebounding,” Jones said.

Jasper County

Figures for Jasper County’s next budget year are being worked on now, but as of this month, the county’s sales tax revenue is down about $261,000, or slightly more than 5 percent, for the 10 months of the calendar year, said the county auditor. The county’s fiscal year starts Jan. 1.

Webster said he has made a preliminary forecast for next year’s budget estimating revenues at nearly $14.7 million, about $160,000 less than the figure for the general revenue fund in 2009. He said the county has not completed the budget because it is waiting on notification on the amounts of grant money it is to receive.

The county also doesn’t yet know the extent of some of the cost increases it will face. “We know there will be an increase in health insurance and LAGERS (the pension plan for local government employees in Missouri),” Webster said.

It costs $750,000 a month to pay salaries for county workers at current wage rates. “That’s the big part (of the budget),” Webster said. “We did not allocate money for raises last year. Whether or not we will be able to build in additional money for salaries in 2010 we don’t know yet.”

Neosho and Newton County

City officials in Neosho, facing a loss of about $900,000 in sales tax revenue in a $25 million budget, have cut wages, personnel and some city services.

Blackwood, the city’s finance director, said the city laid off nine employees temporarily and will not fill four vacant positions. Filling a fifth open job is pending the receipt of a grant.

All other city employees took a pay cut of 3.7 to 3.75 percent.

“In addition to that, each of the department heads was charged with trimming (the department budget) as close as they could to 13 percent” by reducing expenses for things such as electricity bills and gasoline costs beginning Oct. 1, Blackwood said.

To achieve that, some city property is not being mowed as often, and the annual leaf-pickup service has been canceled, Blackwood said. He said budget reductions are especially affecting services and employees in the parks and streets departments.

Newton County will spend $500,000 to $600,000 it had marked as contingency or reserve money from this year’s $8 million budget to offset the loss in sales tax revenue, but it will not cut any services, the county commissioners agreed.