Friday, November 20, 2009

Taxing less to take more

County Judge Dave Bisbee is apparently hoping everyone is so happy about their millage decrease that they don't look deeper into the where the money they are still spending will go. But this isn't just an anti-Bisbee story. This is a problem that started well before Judge Black retired.

If we look at the story by Tabatha Hunter, you'll find a few gems that, by themselves, look like nothing.
"Under the new millage rates, the taxes collected for the county general fund will be raised from 4.8 mills to 5.0 mills while the county road fund tax is lowered from 2.2 mills to 1.9 mills."
The county, theoretically, collects less money on property taxes — one-tenth of one percent, the equivalent of $1 (not Hunter's $2) on a $100,000 home. Whether $1 or $2, the decrease doesn't take a lot of value from the county tax rolls. One-tenth of one percent, to be exact.
But there's also the shift in taxes, rom the road fund to the general fund. The reason is that the county doesn't have to share the general fund. Because of the shift, Rogers will lose $325,000 and Bentonville will be short $250,000, according to the Daily Record.
But none of this would be necessary if Benton County had been smarter with its money for the last few years.
Before we go too far, we must point out that Bisbee was set up to lose on this one.
The downfall started in 2008. Unfortunately the details come only from my memory, as the newspaper online archives have been wiped from the Web sites.  In 2008, the Daily Record ran a story showing the big oops. Comptroller Richard McComas told the Justices of the Peace that, oops, he and his staff had forgotten to remove Bella Vista revenues from the 2008 budget projections. That meant that the county would not meet the projections for the year. So they did what any intelligent government would do when facing a certain recession and a budget shortfall. They raised their projected revenue growth.
On paper, it worked. For the rest of 2008, the county received remarkably high revenues, allowing them to meet their expenditures without cutting spending. Then the recession hits, and the county starts panicking.
For a comparison, you have to look to Rogers and Bentonville. Times have been tough, and both cities have been trying to squeeze everything they can out of the leanest budgets. But they also have a contingency plan. Back in 2008, when money was flowing, they added to their reserve funds, increasing that "rainy day" fund in case the local economy gets even worse, which it technically has now that the county is taking money out of their pockets.



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