Mar 21, 2013 - By Eric Blom, Staff WriterAnalysts predict revenues coming into Fremont County's general fund will not meet expectations this fiscal year and will drop again next year.
Fremont County treasurer Scott Harnsberger and deputy treasurer Jim Massman presented their estimates to the Fremont County Commission this month.
The treasurer's office expects about $22.8 million to flow into the general fund in fiscal year 2013, $270,000 less than budgeted. Projections show general fund revenues down by about $600,000 next fiscal year to $22.2 million.
Fiscal years run July 1 to June 30 and are named by the calendar year in which they end.
Passage of an increased fuel tax in the state Legislature and an optional 1 percent sales tax in the county's general election last year, however, will mitigate the losses.
The general fund pays for about three quarters of the county's operations, including government departments and elected officials' offices and the detention center. It does not cover major roads projects, the solid waste district or the county weed and pest control district.
Several changes had significant impacts in this fiscal year.
Officials expect state assistance to be $195,000 lower than anticipated, and investment income will likely be down $120,000 from original estimates. State sales and use tax income is expected to be up $100,000, and payments from the federal government in lieu of property taxes on federal land within the county will be $131,000 higher than expected.
Such income from the U.S. Government is based on land use fees. The federal sequester reduced those payments by 95 percent, but the volume of use fees buoyed income above projections despite the 5 percent reduction.
Fremont County Commission chairman Doug Thompson, in an interview, said the budget shortfall does not worry him.
"We'll just have to manage our money carefully," he said.
Thompson added revenue from new taxes could alleviate the situation.
1 percent tax
Optional 1 percent tax income will start to supplement the county's coffers this fiscal year as the tax takes effect April 1.
"We're anticipating about 1 million dollars coming in this fiscal year," Harnsberger said at the commission meeting. "We'll accrue about 3 months revenue coming in this fiscal year that will be available."
The commission voted unanimously to create a special revenue account outside of the general fund for optional 1 percent tax income.
Harnsberger said such an account will help track the funds which the county can only use for infrastructure projects. He said some infrastructure projects planned for this spring have been funded could be funded from the 1 percent fund, freeing up the money that had been earmarked for that construction.
"So that could be showing some savings to anticipated expenses in our general fund," commissioner Stephanie Kessler said.
Revenue lower in fiscal year 2014
The second estimate of a $600,000 decrease in revenue in fiscal year 2014 will guide the county budget for that period.
In an interview, Thompson said lower revenue will make the county board hesitate to take on new spending but they will not necessarily cut anything.
"It's not direct," he said. "You just keep (the lower revenue) in mind when you're budgeting."
Significant changes pushing revenue down in the upcoming year are a $900,000 decrease in property taxes and a nearly $1 million reduction in income from federal payments in lieu of taxes. Developments raising income are $780,000 more from increased state fuels taxes, almost $400,000 in additional state assistance and $247,000 in increased revenue from County Clerk fees.
A recent raise to the state fuel tax largely brought bump from that source. Fuel tax revenue will be divided betweent he general fund and a special revenue fund for road construction.
"Property taxes account for about 35 percent of our total revenues," Harnsberger said.
Forecasts for fiscal year 2014 show property taxes generating $8.5 million. Property tax income is based on the tax rate and the amount property in the county is worth, called the assessed value.
"We anticipate the total assessed value will decrease by 6.5 percent to $951 million for the fiscal year 2014," Massman said.
He added the estimate was preliminary, and officials would have a more exact figure before the county budget is finalized.
The assessed value in fiscal year 2013 was just over $1 billion.
Lower payments in lieu of taxes resulted from funding reductions at the federal level. Additional revenue from state assistance and County Clerk fees are a result of state level legislation.
Optional 1 percent tax revenue should bring in about $4.2 million to the county in fiscal year 2014, Harnsberger said.
Those dollars will go into the special revenue fund, however, and not the general fund.
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