Lagging tax collections lead Houston to cut SPLOST spending

wcrenshaw@macon.comJanuary 18, 2014 

WARNER ROBINS -- Houston County is scaling back some of its special purpose local option sales tax spending after collections lagged last year.

Collection of the current six-year SPLOST began Oct. 1, 2012, and to date revenues are $3.3 million short of what had been projected. December sales tax collections are not yet available, but records through November show the actual collections were down from the same period the previous year.

Houston County Commission Chairman Tommy Stalnaker said this is the first time actual SPLOST collections have declined in recent memory. Records show that through November of last year, the county collected $18.9 million on the SPLOST. Over the same period in 2012, the county collected $20.3 million.

As a result of the shortfall, pending projects funded by the 2012 special purpose local option sales tax will be cut by 12 percent until collections turn around. Projects funded by the 2001 and 2006 SPLOSTs will not be impacted because those sales taxes have already been collected.

Stalnaker said he has informed the cities of Perry, Centerville and Warner Robins of the need to cut spending on SPLOST projects to ensure all projects on the list are completed.

“I’m optimistic that it will pick back up,” he said. “The main thing is to stop the bleeding.”

He said it’s difficult to pinpoint why the sales tax collections are down because the state does not provide a breakdown of the types of businesses from which the tax is collected.

“All we get is a check,” Stalnaker said.

He suspects, however, that the decline is related to the economy in general and a change the state made last year to how taxes are paid on vehicle purchases. Instead of paying sales taxes, car buyers pay a one-time title fee.

Sales taxes were already lagging even before the vehicle tax change went into effect, but Stalnaker said the gap increased after that.

School system sees loss

The Houston County School System gets a 1 percent local option sales tax as well as its own special purpose local option sales tax.

Steve Thublin, assistant superintendent of finance, said revenues are slightly different from the county’s SPLOST due to certain exemptions. He figured the school system’s sales tax collection declined about 6 percent in 2013.

The local option sales tax dates back to 1983. Thublin said since it began, there have only been four years in which revenues declined from the previous year, and last year was the greatest decrease.

He attributed it mostly to the change in the vehicle tax. However, he said the loss should not have a major negative impact, at least for the near future.

The school system had some cushion built into its SPLOST projections, he said. Also, when the state changed the vehicle law, it gave some revenue guarantees to help make up for any decrease in local option sales tax. He said those guarantees, however, will last for only a couple more years.

In previous SPLOSTs, the county saw about 5 percent annual growth in sales tax revenues, Stalnaker said. It projected 3 percent growth in the current SPLOST, which runs for six years.

The state’s fiscal year began July 1. According to Georgia Department of Revenue figures, sales tax collections statewide for the current fiscal year declined 4.1 percent compared to the same period the previous year.

Spending cut as preventative measure

While it’s possible an uptick in collections could make up for the loss from the past year, Stalnaker said SPLOST spending is being cut to ensure all of the projects get done.

“We are taking corrective measures,” he said.

Centerville Mayor John Harley said one of the major projects in the city’s portion of the 2012 sales tax, a new police station, can’t be cut because it has already been built with borrowed money. The city will pay off the $2.1 million project, which included the renovation of the former library into Centerville Municipal Court, as the sales tax money comes in.

Harley is hopeful collections will turn around but said if they don’t, the city can cut some of its street paving projects. He also said the police station came in under budget, which will help.

“We are still anticipating that it’s going to turn around,” he said.

While previous SPLOSTs in Houston were heavily focused on roads, the 2012 SPLOST was more geared toward capital purchases such as patrol cars and equipment.

That means deputies may be driving older cars longer and replacement of some equipment may be delayed, Stalnaker said.

Warner Robins’ portion of the 2012 SPLOST included funding for parks and recreation, as well as patrol cars for the police department.

The SPLOST was originally projected to generate $155 million.

To contact writer Wayne Crenshaw, call 256-9725.

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