Law enforcement tax proposal draws mixed reactions

by Paul Schreiber

SBJ Reporter

pschreiber@sbj.net

Greene County Sheriff Jack Merritt isn't the only person who has questions about the quarter-cent sales tax on the Feb. 3 ballot.

Merritt stated his objections regarding the tax, known as the Law Enforcement Sales Tax II, in a Jan. 13 news conference. He called the manner in which the tax is being presented "deceptive."

Bill Compere, candidate for the District 2 commissioner's seat and a CPA, says the proposal is unsound, brought up at the last minute and based on outdated information.

The tax is designed to bolster county coffers against recent budget cuts. In fiscal year 2003 a quarter-cent sales tax produced nearly $10 million in revenues for the county, said Jeff Reinold, Greene County budget officer.

If passed, $4.5 million of the revenue generated would replace funds from the general revenue budget that have been funneled to the law enforcement fund.

"We've been propping up the law enforcement program with general revenue money since the inception of the first law enforcement sales tax. The first law enforcement sales tax was intended to stop the flow of general revenue money at $10 million to law enforcement activities," Reinold said.

Of the remaining tax revenue, $1.5 million to $2 million would go toward annual budget shortfalls, $1 million would cover 26 new jail officers, $1 million would go toward a five-year commitment for a regional crime lab and $1.5 million for other capital improvements, such as expansion of the courts facility, the juvenile facility or the jail.

Assuming passage of the tax, Reinold said, "We will shore up our balances in the law enforcement fund, which will allow us to avoid the cuts to the prosecutor or the sheriff or the juvenile department." Salary levels for the 26 sheriff's positions set to be cut if the tax isn't approved range from $19,000 to $40,500, he added.

While boosting staff numbers in the jail system made sense to Compere, he said applying funds from a sales tax increase to expand operations during a budget crunch was not reasonable. He added that the county should find other ways to hold down expenses rather than make the proposed position cuts to law enforcement.

Lack of discussion

Compere contends that lack of public discussion on the issue hasn't created "the opportunity for the citizens to buy into it." Compere added that because the 2002 audit of the county's books is incomplete, the proposal has little basis in fact.

Audits "almost always have some sort of adjustments in them," Compere said. "Plus a lot of times they make recommendations and, when they get a year behind and the audit report is a year old, any recommendations are just pretty well meaningless."

Reinold said audits usually begin in April or May when the year is officially over and all financial reports are complete. He added that 2002's audit was delayed when Greene County Auditor Cindy Stein underwent surgery last summer.

The independent auditor for the county is Davis Lynn & Moots PC CPAs.

Andy Marmouget, partner with Davis Lynn & Moots, said the Greene County financial statement audit typically begins in May and is complete by July or August. The audit of 2002 financial statements will be complete by the end of January.

In a Jan. 4 press release, Compere stated that "The county should act like every other business in Greene County and cut costs when their revenues decline. As a certified public accountant, I can see that each major sector of the county budget should be adjusted, not just law enforcement. Once every appropriate spending reduction is in place, we should consider an additional tax increase, not before."

Greene County Presiding Commissioner Dave Coonrod said that while the county has tried to hold down expenses,"we're at the end of our rope. We're left with no alternative now but to ask our bosses, the constituency of Greene County, what they want us to do."

Either the county will maintain the programs it has or it must "perform radical surgery. We don't want to, but we'll have to," he added.

Compere argues that consolidation of city and county services is a better way to go. "The county and the city of Springfield should work together to consolidate services in order to cut costs. The fact that both organizations have tax issues on the same ballot has damaged their working relationship and made cooperation less likely," he said in the release.

A city concern over the tax proposal is "the county would be using up all the law enforcement sales tax that's eligible to be assessed," Compere said.

The ballot issue

Total Greene County appropriations for 2004 are at $94,047,571, while forecasted receipts are $91,147,907, Reinold said. The various Greene County departments called for $34,052,822 in their respective budgets against an appropriated amount of $30,520,525.

That leaves a $3.5 million shortfall. The lion's share of that shortfall, $2,389,334, was taken from the sheriff/jail appropriation with another $428,044 coming from the prosecutor's office, according to numbers in the 2004 Greene County Budget.

However, Compere said that raising $10 million is inappropriate to cover a $3.5 million shortfall.

Continuing need

The original Law Enforcement Sales Tax, approved in 1997, upped sales taxes by a quarter cent three-eighths of a cent for law enforcement and one-eighth of a cent for capital improvements; the capital improvement portion had a sunset clause, ending the tax in 2002, Reinold said.

If law enforcement wasn't in dire straits, an additional tax wouldn't have been proposed, Coonrod said.

"The expenditures that we have for law enforcement are exceeding the revenues that we take in to support law enforcement," he added.

The quick fix has been done by taking general revenue reserve funds to "prop up the law enforcement programs that we have here in place, and we've gone as far as we can without completely depleting our savings account," Coonrod said.

However, the sheriff's department was surprised to see its offices take such a hard hit in the 2004 Greene County Budget, said Tom Martin, county chief of police.

"We were told the cuts would be across the board," he said, "and when the budget came out it wasn't. It was just the prosecutor and our department," Martin said.

Boosting law enforcement revenue, however, is agreeable to Martin. The sheriff's department is not against the tax, he said. "We're not opposed to the tax; we need it. It's just the manner in which it's being presented."

The shortfall

State law enforcement cutbacks of $1.5 million, lagging reimbursement rates on per diems for prisoners, antiquated payroll subsidies for county employees and a 3 percent sales tax growth are among the reasons the Greene County budget has fallen short, Reinold said.

Those factors, plus a drastically reduced flow of money from the state to the local level, are tightening the purse strings.

The loss to Missouri of one-time federal money, coupled with mandatory spending increases, will continue to create budget shortfalls that will not end anytime soon, said Linda Luebbering, Missouri's budget director.

"The Federal Government did a one-time bail-out for states called Federal Fiscal Relief and it is estimated that that's going to generate around $380 million to the state of Missouri," Luebbering said. To date, about $190 million of those funds has been put into general revenue and is used for "ongoing operations, because our regular collections are not sufficient, " she added.

One example of a mandatory spending increase would be the increasing number of people receiving Medicaid benefits, Luebbering said. These people have to be provided health services as the federal government does not allow a waiting list for Medicaid benefits, she said.

"One way that the General Assembly balanced this year's budget was by sweeping money from other dedicated funds into general revenue because those funds have a little bit of balance in them. That balance is now gone from those funds, so you can't do that again," Luebbering said.

The initial, worse-case-scenario estimate for fiscal 2005 is that that the state will face a $1 billion shortfall, but Luebbering said an updated estimate of $500 million to $800 million is more accurate.

Efficiency

While there are fiscal reviews and related meetings prior to finalizing the budget, Compere said, it's the Greene County presiding commissioner and his two associates who set it in stone.

"Three people approve it, but it only takes a majority of them, so that means two people are deciding how to allocate $90 million," Compere said.

Structural changes may be in order for maximum effectiveness, he added. A citizens' committee should look at "what's a more efficient form of government, rather than continuing a commission form of government that may be unwieldy, and maybe we don't need another layer of government here that duplicates some other things."

Referring to city and county parks, health department and library consolidations, Compere said combinations in these departments "have worked very well."