In light of the recent discovery that Summit County sales tax revenue could exceed 2012 figures by a considerable margin, the Summit Stage board discussed Wednesday what effect the increased funds could have on its 2014 budget.
On Tuesday Summit County Finance Department director Marty Ferris said the July 2013 sales tax revenue surpassed July 2012 numbers by 27 percent, putting the county on pace to top last year’s overall revenues by more than $300,000.
Because the transit fund receives all of its revenue from a 2.75 percent portion of the county’s sales tax, Summit Stage could benefit from a 9.4 percent, or $400,000, increase in its 2014 budget if trends continue.
Thad Noll, Summit’s assistant manager overseeing community development and public works, said although the increased revenue would be a welcomed change of pace, the fund would still be a long way from restoring itself back to the “glory days” of 2007.
According to the county’s 2013 budget, the transit fund has been operating at a net loss since 2011, with costs exceeding revenues by more than $1.2 million in both 2011 and 2012. Those losses have dwindled the transit fund’s reserves from more than $1.5 million in 2011 to a projected $114,751 by the end of this year.
But those downward trends have been ongoing since 2008, Noll added, saying the transit fund enjoyed a healthy reserve of more than $3 million following 2007’s economic peak.
Despite cost-cutting measures, such as the restructuring of summer and winter service, among others, Noll said the fund would likely again come in over budget by the end of the year, eating up the last of its reserves.
One of the biggest hurdles facing the Summit Stage Board this year is the unforeseen increase in fuel costs, which are expected to exceed 2013 budget projections by about $200,000.
“When you’re buying 250,000 gallons of fuel each year an increase of a few cents can have a huge impact, but it really comes down to the fact revenues have not rebounded fast enough to keep pace with rising costs,” Noll said. “Hopefully the increase in sales tax revenue will be enough to offset the cost increases, so we can start next year flat. If we get to Dec. 31, 2013, and we have one penny left in the account, I’ll be ecstatic.”
Taking into consideration the transit fund’s $3 million balance was depleted in just about four years and the Summit Stage board’s cost-cutting measures have done little to compensate for rising costs, town of Frisco board member Kent Willis suggested it may be time to begin considering asking the voters for a tax increase.
“We’re doing everything we can to trim expenses, and every time we do, something happens to eat up those savings,” Willis said. “We’re already behind the curve and we know in five years the costs are only going to be worse.”
If the Summit Stage board does consider drafting a ballot question, it wouldn’t be proposed until 2014 or 2015, and would likely ask voters to approve a .25 percent increase in the transit fund’s share of the county’s sales tax. It would be the first such tax increase since 2002, Willis estimated.
A .25 percent sales tax increase would generate about $2.5 million in extra revenue for the transit fund, Noll said.
But Summit County Commissioner Dan Gibbs said tax increases for transportation improvements tend not to poll as well as other endeavors, such as education, at both the state and national levels.
“That’s why it wouldn’t be a ballot question until 2014 or 2015,” Willis said. “We need to think real hard about what our needs are going to be for the next 10 years in terms of capital outlay (equipment purchases), salary increases and cost increases so we can justify the need to the voters.”
“Hopefully the increase in sales tax revenue will be enough to offset the cost increases, so we can start next year flat. If we get to Dec. 31, 2013, and we have one penny left in the account, I’ll be ecstatic.”
Summit County’s assistant manager overseeing community development and public works