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Cap tax may end in October 2009
By Carole Cloudwalker
This document was published online on Monday, June 09, 2008
Collection of the capital facilities tax to raise $13.2 million is ahead of projections.
But just when the tax will end remains unknown.
The tax was imposed in April 2007. When the approved total is raised, the tax will end.
Reporting to the Park County commissioners last week, the financial advisor for the county library project, Powell banker Dave Reetz of First Company, said it appeared the tax would generate its target $13.2 million “ahead of schedule.”
He added that the tax likely could be removed “in October.”
Later last week, Reetz said he should have been more specific about the tax removal date, explaining that he meant October 2009 - not October 2008.
The additional one-cent county-wide sales tax was approved by voters to bring in $2.2 million toward the $5.8 million cost of remodeling the lower level of the former Marathon Building to serve as the Park County Library.
It also will raise $2 million to renovate the Meeteetse pool and establish an operation and maintenance fund, and generate $9 million for a new Powell aquatic center. (That includes $7 million for construction plus $2 million for an O&M endowment.)
Reetz said being more than 12 percent ahead of schedule in collections at this time likely will mean the tax can end earlier than the 30-36-month period anticipated.
Reetz told the commissioners he will come back next month with more specific projections about completion of tax collections.
“I have to put science to it,” he said. “But if nothing changes, we'll definitely be ahead of schedule.”
The peak months for sales tax collections in Park County are June-August, he said.
But there are unknowns for those months in 2008 and beyond, such as what crude oil selling for $150 per barrel will mean to the traveling public, that could impact this summer's collections and throw off projections.
First Company has strived to be conservative in its projections, Reetz said.
He added that because of changes in state law it's important that the county be as close as possible in estimating when to request that the cap tax end.
Before this year, the law required that the last dollar voters approved be raised before a capital facilities tax could be stopped, he said.
Under the new law, the entity receiving the tax money can project ahead when the total will be reached, and request a shut-off before that time, since distribution of sales tax lags behind its actual collection.
But if the flow of tax money is halted too soon, the tax cannot be re-imposed, and the entity would be out some money it was entitled to, he said.
Going “long” on collections would mean there would be an “overage” situation, such as occurred with the county's first cap tax to raise money for a new jail/law enforcement center.
In that case, citizens might object to that “bad timing,” Reetz explained.
“There must be a balance between fiduciary responsibility and responsibility to taxpayers,” he said.
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