County proposes tax increases | RecordCourier.com

County proposes tax increases

by Susie Vasquez

After balancing Douglas County’s 2007-08 budget with reserve funding, commissioners voted to move forward with ordinances to add a utility operating fee, business license tax and 911 communications fee in Douglas County.

Expenditures exceeded revenues in four budget categories, the largest a $906,000 drop in Douglas County’s general fund, according to county reports.

Commissioner Kelly Kite said the problems can’t be fixed with departmental adjustments or by laying a few people off.

“You can’t cut $1 million with pencils and erasers. If you cut the budget, you cut programs,” he said. “I’m probably the biggest advocate of keeping taxes as low as possible and that’s probably what got us here today. I’m going along with the (county staff) recommendations because I don’t have a better answer.

“We come up with the revenues, or the lights go out in the park and the potholes won’t get patched. We need to grow up and get the revenue coming in or next year, we’ll have a blood bath and there’s not a thing we’ll be able to do about it,” Kite said.

Commissioner Jim Baushke said the budget was barely balanced last year and the problem will be worse next year if revenues like the room and sales taxes keep declining.

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“I’m in favor of using reserves as a bridge, but only if we can get the revenues instituted. Otherwise, we’ll be out of reserves soon,” he said. “We’re in trouble because we haven’t initiated gradual tax increases to cover things like inflation.”

The counties are the financial safety net for emergencies, Baushke said.

“The counties are where the rubber meets the road,” he said.

“If there’s a flood, the state won’t have the money and neither will FEMA (the Federal Emergency Management Agency). We have to keep healthy reserves, and that means everyone will have to put more in the pot.”

Growth in sales and property tax revenues over the last three years have saved the county from having to make significant budget cuts, but this year sales tax revenues have dropped 5.9 percent.

State consolidated taxes are expected to drop 3.9 percent. Room taxes are projected to generate $6.5 million, down from a $7 million peak in 2000 and gas taxes have been declining for 10 years. Property taxes increased 11.5 percent, according to a report by County Manager Dan Holler.

“Douglas County has historically been a ‘low tax’ county and relied on nontraditional revenues, like gaming and room taxes that are no longer able to support the service demands of the community,” Holler said.

Commissioner David Brady denounced the use of reserves to balance the budget.

He supported the 911 communications fee but cast the dissenting vote on the business license tax and the utility fee because he doesn’t know what the money will be used for.

“I can’t support the use of revenue enhancements at this time. We may need to cross that bridge eventually but right now, there are other approaches,” he said. “Operational audits and priority based budgeting could reveal opportunities for savings.”

Douglas County residents filled the chamber of the old courtroom for Monday’s budget meeting and most favored the new taxes to prevent the termination of services.

“We need dedicated funding for parks and recreation, senior nutrition and the library,” said Douglas County resident Kelly Gardner. “I want to keep our quality of life. It’s a tough decision but it’s long overdue.”

“It’s a miracle library staff has done so much with their limited resources,” said Bob Chambers, a library board trustee. “Now we’re facing a cut in services when the number of patrons is increasing. I urge you to restore the library budget.”

Deborah Marks, dog trainer and 4-H member, said she needs the fairgrounds pavilion for her classes.

“Without these kinds of programs, the kids will be hanging around town,” she said. “4-H keeps them on the straight and narrow.”

All measures, which require separate county ordinances, require two readings at regular meetings of the Douglas County Board of Commissioners. If approved, they will not be implemented until later in the year.

The proposed 1-percent utility operator fee, which will apply to telephone, electric and gas utilities, would be effective in September. A second 1-percent fee would be imposed in 24 months. Every 1 percent levied would add an estimated $850,000 to Douglas County coffers, according to county reports.

The 911 communications fee will add 25 cents per phone line to residents’ monthly phone bills.

The measure will mean an additional $75,000 to $100,000 in annual revenues, the restricted funding used to enhance the telephone system, pay personnel and training costs to maintain and update the database for the system and fund costs associated with upgrades and maintenance.

If approved, a business license tax could be based on any number of parameters, from a flat charge to the number of employees or gross revenues, according to Assistant County Manager Michael Brown.

A flat rate business license fee would mean an estimated $600,000 to $700,000 annually for the county, according to county reports.

— Susie Vasquez can be reached at svasquez@recordcourier.com or 782-5121, ext. 211.