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Major decline in use tax revenue hurting county

Kim Fickett by Kim Fickett
April 9, 2005
in Platte County
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A vendor’s $400,000 local use tax overpayment to Platte County last year has now placed a major dent into the county’s 2005 budget.

“Last year our local use tax receipts for the month of March were almost $500,000, this year they were only $3,000,” said Platte County Treasurer Bonnie Brown.

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After comparing the receipts for the last two years, Brown stated she started to investigate why there was such a decrease.

“I got a diskette from the Missouri Department of Revenue for each month, and there I was able to see who was refunded what money,” stated Brown.

“The refund to the vendor was for money paid in error in 2004. The vendor paid more than they were supposed to by around $400,000.”

According to Brown, the vendors overpayment stretched over the first, second and third quarters, and it is unsure when the mistake was first noticed.

“The vendor had to submit amended returns to get their money back but the county didn’t know what was going on,” said Brown. “That was between the state and the vendor.

“The state withheld money for our disbursement so it could be given back to the vendor. We will experience a $400,000 expense of sorts because of the refund that we had not foreseen,” stated Brown.

After her findings, Brown gave the latest report to the county commissioners at last Thursday’s meeting.

“We first found out about this three weeks ago that the money didn’t come in,” said 1st District Commissioner Tom Pryor. “This is a serious situation for the county this year.”

According to Auditor Sandra Thomas’ calculations, the $400,000 loss may impact this year’s budget if local use tax doesn’t increase 14% each month for the remaining 2005 calendar year.

“This is a great concern for us because we’re already down from the budget last year and now if we lose this $400-500,000, our budget will be reduced to $2.8 or $2.7 million in use tax revenues,” said Pryor.

Presiding Commissioner Betty Knight shared in Pryor’s concerns.

“Right now it looks like we’re not going to make budget, but you never know what’s going to come in throughout the year,” said Knight. “It’s highly unlikely that we’ll meet that 14% (per month increase), but local use tax is hard to gauge. We’ll have a better judge of that by the end of the second quarter (first of July).”

According to 2nd District Commissioner Jim Plunkett, in 2004 the county collected $3,488,059 in local use tax. This year the commission took a conservative approach and budgeted the local use tax earnings at $3.2 million.

“We thought we were doing the right thing by cutting back 10%. If you take the actual collections of the use tax, instead we should’ve cut it back by 20%,” said Plunkett. “We just didn’t have enough information to make a good judgment call. We thought we were just being safe.”

Plunkett also pointed out that there was a $2 million cash carryover in 2003. However in 2004 the carryover was $1,949,670.

“In 2004, the former county commission lost $50,330. In other words, they over spent by that much, which means they didn’t balance the budget,” said Plunkett.

“Add the $400,000 to that, and they actually overspent by $450,330.”

While it’s not apparent if budget cuts will definitely need to be made, commissioners are keeping that possibility in mind.

“This is making it into a whole new budget now. We can’t go back into any other officeholders budgets and make any other adjustments until November,” said Plunkett.

“What makes me nervous is that if you go back and look at what was collected in January, we were down 14%, in February 20%, and in March you can’t look at it because that’s when they took the credit-and it shows we’re down 99% from what we collected.”

Knight said she prefers to wait and see what local use tax figures bring as the county gets further into the year.

“We have to get a little farther into the year to see what cuts need to be made, if we would even need to make cuts,” stated Knight.

An immediate concern for the commissioners is why they weren’t notified regarding this refund by the Missouri Department of Revenue earlier.

“We need to visit with the department of revenue, number one, and figure out how did this happen. They paid in this amount and nobody caught it and no one asked any questions. And what’s most appalling is that no one contacted us,” said Knight.

“I think the governments should be working together instead of working at odds, and right now that’s where we’re at in this. And I think that’s an appalling thing.”

At Tuesday mornings commission meeting, the commission voted to hire consultant Woody Cozad to research their situation.

“We want to know if anyone had any prior knowledge and at what point did the state know about it and should notification have been given,” said Plunkett.

Pryor says the lack of communication between government bodies is uncalled for.

“For a $400-500,000 drop in use tax, we’ve been getting a lot of casual answers. The lack of information that Platte County has received is very upsetting,” said Pryor. “It would have been nice to have a little heads up.”

Pryor also encouraged Knight to express her views on what has happened at Platte County on her next trip to Jefferson City.

“I’d certainly like you to make your voice heard in a couple of weeks when you’re in Jefferson City. I’m still desiring answers on how this was handled,” stated Pryor.

Tags: platte countytaxes
Kim Fickett

Kim Fickett

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