City franchise fee revenues down

City officials say they’ll continue to monitor steep declines in electrical franchise fees and sales taxes.

 

Presenting a first-quarter financial report Tuesday, Finance Director Donna Williams said the franchise fees – a percentage of gross revenues paid during the first quarter by local electrical providers Georgia Power and Jefferson Electric – are down by $1.1 million over last year.

City leaders last year forecast a decline of $600,000 from a paper machine shutdown at Resolute Forest Products, for years one of Georgia Power’s largest customers. Around the same time another large customer, Fibrant, announced plans to shutter most of its Augusta operations.

Electric franchise fees represent the largest single source of tax revenue for the city’s general fund and were budgeted at $14.6 million for 2017, down from $15.2 million in 2016.

City Administrator Janice Allen Jackson said through a spokesman the decrease was “larger than we anticipated” but decreases in franchise fees and sales taxes were expected. “We still have 10 months of sales tax collections remaining in the year,” she said.

Sales tax collections – the four, one-percent taxes collected for schools, transportation, local government and the Local Option Sales Tax – also continue to decline.

“In 2015 and 2016 we have experienced absolute declines in your sales tax revenue for your local option sales tax,” Williams said.

As of February, because March payment information was not available, 2017 sales tax receipts for the LOST were down $88,218 over last year, about 11 percent below budgeted amounts.

Low sales tax collection rates have varied impacts on the government, Williams said. While the Transportation Investment Act expires after 10 years, low collection rates for the other taxes used for capital projects merely slow or delay the projects until enough funds are collected.

The LOST, however, is used like ad valorem taxes to support government operations and cuts into funds available to the general fund, law enforcement and the Urban Services fund, she said.

The city last year budgeted some 38 percent of law enforcement funding from the LOST, and 51 percent of funds for the Urban Services District, located in the pre-consolidation city limits, according to Williams’ report.

“Law enforcement has fewer other sources of revenue to depend on,” she said.

The sales tax decreases continue a several-year trend that officials have struggled to explain, due largely to limited information provided by the state about collections. Last year was the fourth and final year of staggered implementation of a new sales tax exemption for energy used in manufacturing, Williams said.

When manufacturers won the state tax break and lobbied to stop the local government from substituting an excise tax, city officials estimated the break will cost the government between $3.5 million and $4 million.

Williams said the city could make up the difference by year’s end, in part from limited growth in the tax digest, but said the city continues to monitor collections.

“It is not a catastrophe right now; it is a concern,” she said.

Reach Susan McCord at (706) 823-3215 or susan.mccord@augustachronicle.com.

Raises part of Augusta administrator's budget proposal
Storm fee will pay employee salaries
Rural residents question stormwater fee
Jerry Whitcomb 5 months ago
"The sales tax decreases continue a several-year trend that officials have struggled to explain,"

I can explain it. Working taxpayers leaving as fast as they can to get away from our "officials".......and even the ones that have to live here that still have money left to spend after the tax increases and all of the fees are spending their money across the river or over in Columbia county. Most just don't have that much left to spend after being raped by our "officials".
Allen Wylds 5 months ago
Yeah, it's not rocket science...i can drive 10 (or less) minutes over the state line and pay less sales tax and fill my car up for 10 cents less on the gallon....it will continue to decline because you keep passing SPLOSTS, rain taxes, grbage taxes and hiding the money instead of using it for what it's supposed to be used for...DUH!!
Johnny Rio 5 months ago
It would be interesting to see a comparison with other counties sales tax revenue.
Val White 5 months ago

Those homeowners that are lucky enough to be able to sell and move out of RC are doing so.  That means less people to purchase their goods locally.  The rest are either too broke to spend much after all the extra taxes or they are going to N. Augusta or CC.


Democrats never have and never will learn that you can only take so much of others' money and spend it like drunken mice before it leads to Chapter 11.

Steven Jackson 5 months ago
We broke the chain, but actually plan to move back if we win the lottery. ☺

We agreed if we win the lottery, we'll toss the $250K needed to grease the right hands to get a Deconsolidation Vote and Process.

Many Businesses we spoke with liked the Idea as it would save them 6-11% in needless  services type fees and taxes.

Jim Hall 5 months ago
One of many Democrat strategies.  Bankrupt the city, bankrupt the county and bankrupt the country.   Chaos and Anarchy will rule the streets.
Steven Jackson 5 months ago
Conservatives will rule city, county and Country in weeks.
We have the means of rebellion not snowflakes.

Val White 5 months ago
Anarchy is well on its way thanks to the liberals and their money donors like George Soros.
Steven Jackson 5 months ago
Seriously the City Tax Planners never imagined tax rev loses from declining business operations?

More

Fri, 06/23/2017 - 23:54

Man wanted in Burke County shooting

Sat, 06/24/2017 - 01:00

Rants and raves

Around the Web