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Please note, all budget workshop reporting has not been published yet due to space restraints in the paper. We should have those available next week.
RBC | A series of budget hearings for individual county departments started bright and early last Monday at the courthouse. The hearings are expected to continue through early next week.
Monday started with a review of the budget projections for 2021 by finance director Janae Stanworth and a recap of the proposed budget, released Oct. 15. The estimated revenue for 2020 is $28,383,623, slightly higher than the budgeted $26,178,965. The 2021 proposed revenue is $25,548,912. Decreases are coming mainly from property tax, licenses/permits/fees, highway use tax funds and interfund charges. Also anticipated are reductions in use tax and investment earnings. Increases in anticipated revenue are in changes for services (landfill, communications, marshal fees for holding U.S. Marshal inmates in the jail), and COVID funds that will carry over to next year for the Department of Human Services and Public Health. Overall, the county anticipates a $2.3 million budget deficit for 2021.
In 2020 the county budgeted $12,558,793 for personnel costs, but actual estimated spending is currently $11,855,273. For 2021 the county is proposing to spend $11,855,165 on personnel. When compared to the proposed budgeted cost for this year, the new proposed number for 2021 represents a decrease of around $703,000. When compared to the actual spending for this year, the new proposed number for 2021 represents a decrease of just over $100.
Whatever the actual decrease may be, it comes from a cut of 6.7 full-time-equivalent (FTE) positions in the county. The approximately $11.8 million budgeted 2021 falls in line with actual personnel expenditures in 2019 ($11.7 million) and 2018 ($11.7 million).
Budget and Finance Director Janae Stanworth explained that typically the county spends about 80% of the budgeted amount for operating expenses, including personnel. For 2021 that additional “cushion” was the first thing to get cut, meaning all departments’ budgeted expenditures will be much closer to what they have actually spent at the end of 2021.
Sales and Use Tax Department
Like other departments, Sales and Use Tax Administration has been asked to cut 5%. Director Debbie Morlan said her budget expenditures were already lean, so she didn’t have room to cut from any line items other than her own salary. For that reason Morlan, the sole employee of the department, proposed a 25% reduction of her own hours starting in January 2021, to 30 hours per week. Stanworth estimates the reduction will save about $18,000, a 15.9% reduction to Morlan’s overall department budget.
Morlan will continue working at ¾ time through at least June 2021, at which point commissioners will decide whether to allocate more money for Morlan to train a replacement, to continue funding ¾ of a position, or otherwise.
This year the department is projected to collect $1,915,000 in sales tax and construction and building material use tax, and an additional $480,000 for motor vehicle use tax which is administered through the clerk and recorder’s office but is still counted as use tax. For expenditures the department spent $113,691 based on the latest budget estimates. It is one of the only departments in the county that consistently brings in more revenue than it spends.
Morlan has worked for the county for 23 years, but she says that in the last two, her normal workload has increased. In addition to normal sales and use tax administration, she said thousands of new accounts have registered with the county. “I think I have 70,000 accounts right now, and those vary per month,” said Morlan.
The increase in sales tax accounts can be attributed mainly to a 2018 U.S. Supreme Court ruling against online retailer Wayfair. The ruling allows states to collect sales taxes from online, mail-order and out-of-jurisdiction retailers. Subsequent action at the state level meant increased revenues for local governments, but it also meant an increase in necessary administrative hours to manage new accounts from all over the country and even worldwide.
Rio Blanco County’s tax law, originally passed by popular resolution in 1981, adds an additional level of complexity to sales tax collection, administration and allocation. Morlan said most counties in the state only have one tax jurisdiction. Rio Blanco County has five, including the towns of Meeker and Rangely, and three other county-based jurisdictions.
“Neither one of our towns have any city tax. Our towns have sales tax, but it’s all county sales tax. That’s why the county is in charge of administering that sales tax,” Morlan said. She added that the other jurisdictions are for unincorporated parts of the county. One for upriver, one for Rifle mailing addresses in the Piceance Creek area and one for the remainder of Rio Blanco County. She said she wasn’t sure why there was more than one jurisdiction for unincorporated parts of the county.
Morlan also said having five jurisdictions causes confusion with vendors, who file their taxes in the wrong place without realizing it. A common example would be a business operating in unincorporated Rio Blanco County filing tax payments under the town of Rangely because they have Rangely in their address, even if they’re not operating within city limits. Some operations on County Road 5 are on a Rifle mailing route so they often send their tax payments to Rifle or Garfield County.
“With all these thousands and thousands of new accounts that we’ve got, so many of them throw it into the towns because they don’t know any better,” Morlan said. Catching these kinds of filing mistakes and thus ensuring the correct allocation of tax revenues within jurisdictions is what she spends much of her time doing.
That time spent has netted the county more than $1 million in additional revenue in the last two and a half years, according to Morlan. “The revenue that I bring to the county that’s over and above what they’d have if I’m not here, this is where that comes from,” she said, adding that the revenue was on top of the regular tax collections she was responsible for administering. She also expressed some regret for not bringing more awareness to the roles and responsibilities of her department, as the 2021 budget process has already cut her full-time status, and even threatens to dissolve her department entirely.
In August county staff discussed the idea of hiring a new Sales Tax Technician at an average salary range, which could save some money. Other ideas were to reduce the position from full-time to part-time, to dissolve the department and assign sales tax administration duties to the budget and finance department, or some combination of those options.
During her department-specific budget meeting Oct. 19, Morlan defended her department to county commissioners, questioning whether or not proposed changes were actually budget related. She also confronted commissioners about past statements made regarding her position, including “insinuations that her position had been a waste of taxpayer money,” and Moyer’s statement that her department’s impact on revenue was a “matter of opinion.”
“Bottom line, I don’t think you guys did your homework where I’m concerned, and have forced me into defending myself and my position,” said Morlan. “We need to work together, we need to communicate. We need to use the expertise of all of us instead of just a handpicked few. I think I deserve that, I think the people [who] work here deserve that, and I think the people of our county deserve that.”
The Board of Commissioners did not respond to Morlan’s comments or questions during the workshop.
Special to the Herald Times