County proposes raising gross receipts tax

By Jack King

Curry County commissioners voted 3-2 Tuesday to ask voters to approve an increase in gross receipts taxes to cover a county budget shortfall estimated at between $200,000 and $400,000.
A majority of the commissioners approved creating an ordinance authorizing a one-eighth percent increase in county gross receipts taxes that would be placed on the ballot in a Sept. 23 special election.
Gross receipts taxes are levied on the total receipts of businesses. Businesses normally pass the cost of the taxes on to customers.
A one-eighth percent increase would generate about $750,000 a year and would be fairer than a property tax increase, because the citizens would vote on it, the commissioners said.
But Commissioners Pete Hulder and Kathrynn Tate voted against authorizing the ordinance, saying the county should tighten its belt and dip into its reserve rather than raise taxes.
“We have a deficit of about $300,000, but we have a reserve of $2.4 million. If we’ve got the money, we shouldn’t ask the public to pay a tax,” Hulder said.
Hulder said the state does not require the county to maintain a reserve, although the state Department of Finance Administration may recommend maintaining a reserve of three-twelfths of the county budget.
County Manager Geneva Cooper said she is not advocating a tax increase. However, she said the county should be cautious about taking too much out of its reserve. She said she has made it a practice to keep a reserve account equaling five-twelfths of the county’s budget.
“Reserves are so you can operate your government in an emergency for at least five months without any tax revenue. Three-twelfths is what DFA recommends; you don’t want to go below that. Some counties have gotten in trouble at one-twelfth,” she said.
Hulder argued that at three-twelfths the county would have about $1.5 million, so the county has almost $1 million more than DFA recommends.
Commission Chairman Tim Ashley said a one-time fix next year may not solve the county’s problems. Some county expenses will continue to grow. For example, costs at the county detention center are the largest source of the budget shortfall and cannot be controlled by the county, he said.
Detention Center Administrator Don Burdine said the county cannot refuse to accept more prisoners.
Also, County Clerk Mario Trujillo asked commissioners to consider a 4 percent increase in the wages of county employees, instead of the 3 percent cost-of-living raise now budgeted. Trujillo said the 1 percent increase is needed because the rising cost of health insurance means some employees salaries are actually decreasing.