Saturday Night Live got it right this weekend when, during the Weekend Update segment, we were introduced to Anthony Crispino, a Second-Hand News Correspondent.
It reminded me of the local rumor mill... “Hey, did you hear? So-and-so said such-and-such...”
One thing I always enjoyed about attending regular meetings of political subdivisions is that you see and hear the real story.
I recently discussed the school bond issue with someone who told me all about how additional fees and costs incurred and the school district wasted a lot of money while putting the plans together.
I was at all those meetings when finances were discussed and disclosed and knew the extra fees and charges were non-existent. I told him exactly what I had witnessed and verified with the financial disclosure statements.
That wasn’t good enough for my friend, however, because he had “heard” from several other people that the money was wasted.
I doubt any of the people who he “heard” it from attended all the meetings and asked as many questions as I did, but if you hear something enough, I guess it becomes true.
That’s what I heard, anyway.
Monday, April 19, 2010
Sunday, April 18, 2010
The misunderstood budget "crisis"
In response to my post about the economic development funds, I was asked the following question:
"That's cool and all but is there really a budget deficit and if so how should we deal with it?"
This is my reply.
I’m glad you put that in the form of a question, because it seems lots of folks don’t understand that we are not in a revenue crisis at this moment.
The $650,000 revenue shortfall was anticipated by city management when the budgets were proposed so the department heads were given strict instructions to trim everything possible.
We knew we weren’t going to get the money, so it had to be cut from the budget.
It was hoped that the legislation proposed by Sen. Ken Schilz would pass and the city would be given about $350,000 back. As we now know, that did not happen, but more cities in the eastern half of the state are starting to see shortfalls they did not anticipate and so this is likely to be addressed next session.
Remember when the radio and newspaper said that city council would need to raise our property taxes by something like 25 percent to cover the budgets? That was if the budget was passed as originally proposed without the cuts. That’s how the budget process works. Each department puts together a proposal of what they would really like to have, and then usually settles for what they need to have, or at least what they need to have the most.
The thing to remember if that we shouldn’t have to make these cuts year after year when the taxes we pay are as high as they are.
(And if the rules aren’t changed, we will have the same situation next year.)
Just think, if the state program is changed, we could see a reduction in our taxes without any reduction in services.
That would be nice, wouldn’t it?
"That's cool and all but is there really a budget deficit and if so how should we deal with it?"
This is my reply.
I’m glad you put that in the form of a question, because it seems lots of folks don’t understand that we are not in a revenue crisis at this moment.
The $650,000 revenue shortfall was anticipated by city management when the budgets were proposed so the department heads were given strict instructions to trim everything possible.
We knew we weren’t going to get the money, so it had to be cut from the budget.
It was hoped that the legislation proposed by Sen. Ken Schilz would pass and the city would be given about $350,000 back. As we now know, that did not happen, but more cities in the eastern half of the state are starting to see shortfalls they did not anticipate and so this is likely to be addressed next session.
Remember when the radio and newspaper said that city council would need to raise our property taxes by something like 25 percent to cover the budgets? That was if the budget was passed as originally proposed without the cuts. That’s how the budget process works. Each department puts together a proposal of what they would really like to have, and then usually settles for what they need to have, or at least what they need to have the most.
The thing to remember if that we shouldn’t have to make these cuts year after year when the taxes we pay are as high as they are.
(And if the rules aren’t changed, we will have the same situation next year.)
Just think, if the state program is changed, we could see a reduction in our taxes without any reduction in services.
That would be nice, wouldn’t it?
Saturday, April 17, 2010
Our Economic Development Money
Sidney’s total sales tax burden is 1.5 cents.
In 1980, the voters passed a one-cent sales tax with the intention of providing property tax relief.
In 1988, the voters approved an additional half-cent sales tax for the Community & Economic Development Plan. To more clearly define the use of the funds, the voters - in 1997 and then again in 2007 - approved setting aside half of this half cents to the Job Creation Plan. (These votes approved a 10-year plan each time, so the current plan is through 2017.)
While these funds were created using a half cent and quarter cent as a base, the funds must be clearly defined by the city using a dollar amount. The Job Creation fund totals $300,000 a year and the Community & Economic Development Fund is set at $350,000.
For the Job Creation fund, $50,000 per year is allocated for improvements to the north side by the Northside Neighborhood Development Association and city council. The residents of that area are surveyed and asked to participate in town hall meetings to decide how the funds will be spent. Another $50,000 of this fund is allocated per year for downtown revitalization projects and is managed by the Sidney Historic Preservation Board. This board is a certified local government and is regulated by state law.
These processes have always been held in a public forum, and the public is encouraged to attend any and all meetings.
The remainder ($200,000) is allowed for providing financial assistance to qualifying businesses or to fund tourism-related activities.
There is a 14-page document available from the economic development office that clearly explains what type of program or project qualifies, what type of financial assistance is available, how applications are processed, and how the administrators of the plan are required to update city council on the status of ongoing projects.
It also outlines how funds can be invested when there aren’t any qualified applicants, and clearly states that after any continuous five full-budget years it is shown that less than 50 percent of the funds are spent or committed to programs or projects, the measure will be placed on the next regular election ballot to see if the voters continue to support the plan.
Of the $350,00 in the Community & Economic Development Fund, the following allocations are given:
$120,000 to the Community Center/Recreational Services
$55,000 to Economic Development
$66,576 for ambulance services
$15,000 to the Cheyenne County Chamber of Commerce
$10,000 for the fireworks display
$4,000 to Memorial Gardens
$79,424 to subsidize the swimming pool operation.
Any questions? I'll be happy to do more research. Drop me an e-mail at tamaranelsen@gmail.com
In 1980, the voters passed a one-cent sales tax with the intention of providing property tax relief.
In 1988, the voters approved an additional half-cent sales tax for the Community & Economic Development Plan. To more clearly define the use of the funds, the voters - in 1997 and then again in 2007 - approved setting aside half of this half cents to the Job Creation Plan. (These votes approved a 10-year plan each time, so the current plan is through 2017.)
While these funds were created using a half cent and quarter cent as a base, the funds must be clearly defined by the city using a dollar amount. The Job Creation fund totals $300,000 a year and the Community & Economic Development Fund is set at $350,000.
For the Job Creation fund, $50,000 per year is allocated for improvements to the north side by the Northside Neighborhood Development Association and city council. The residents of that area are surveyed and asked to participate in town hall meetings to decide how the funds will be spent. Another $50,000 of this fund is allocated per year for downtown revitalization projects and is managed by the Sidney Historic Preservation Board. This board is a certified local government and is regulated by state law.
These processes have always been held in a public forum, and the public is encouraged to attend any and all meetings.
The remainder ($200,000) is allowed for providing financial assistance to qualifying businesses or to fund tourism-related activities.
There is a 14-page document available from the economic development office that clearly explains what type of program or project qualifies, what type of financial assistance is available, how applications are processed, and how the administrators of the plan are required to update city council on the status of ongoing projects.
It also outlines how funds can be invested when there aren’t any qualified applicants, and clearly states that after any continuous five full-budget years it is shown that less than 50 percent of the funds are spent or committed to programs or projects, the measure will be placed on the next regular election ballot to see if the voters continue to support the plan.
Of the $350,00 in the Community & Economic Development Fund, the following allocations are given:
$120,000 to the Community Center/Recreational Services
$55,000 to Economic Development
$66,576 for ambulance services
$15,000 to the Cheyenne County Chamber of Commerce
$10,000 for the fireworks display
$4,000 to Memorial Gardens
$79,424 to subsidize the swimming pool operation.
Any questions? I'll be happy to do more research. Drop me an e-mail at tamaranelsen@gmail.com
Thursday, April 15, 2010
Happy Tax Day
I want to clarify statements I've made about local sales tax dollars being used to fund the state's economic development program.
No one is breaking the rules and there are not any "bad guys." The local companies that have qualified for sales tax refunds have been entitled to those refunds because the law says so.
In fact, if a qualifying company did not take advantage of the opportunity to legally recoup hundreds of thousands of dollars spent while creating jobs, we would probably see it as foolishly wasting the opportunity. Why wouldn't any business owner, large or small, want to use any means available to grow and prosper?
It is similar to each of us claiming every possible deduction as we prepare our own returns. We are legally entitled to do so.
Sidney was one of the first communities in the state to understand that funding economic development was a good thing. Locally, we have voter-approved programs to do just that. In 1988, and again in 2007, the voters said yes, they wanted a strong community and economic development plan and were willing to pay for it.
Meanwhile, the state of Nebraska wanted to do what it could to offer incentives to business to relocate to our state or to expand and create jobs. So, the Employment and Investment Growth Act, LB775, was passed and the state decided that the best grease for the wheels was city sales tax dollars.
LB 775 seemed harmless enough. If an employer spent money on goods and services that resulted in the creation of jobs, then it could qualify to ask for the sales tax on those goods and services to be refunded.
If the city had been aware of the magnitude of some purchases that would be made and the sale 'tax returns' that would be claimed, we could have prepared. Instead, LB775 gave qualifying companies several years to ask for the returns, and sometimes a company might delay in asking for the returns until it best suited its own needs. Again, as individual tax payers, we often do the same thing, deciding on certain purchases or making certain decisions based on the tax repercussions.
It's all well and good when the companies creating the jobs are small and the city budgets are large, but when the companies are large and the city budgets are small, the flaw in LB775 become apparent. It is not that job creation or expansion is bad, but the rules of the game aren't fair.
So, we should do whatever possible to change the rules.
Then it can be a happy tax day.
No one is breaking the rules and there are not any "bad guys." The local companies that have qualified for sales tax refunds have been entitled to those refunds because the law says so.
In fact, if a qualifying company did not take advantage of the opportunity to legally recoup hundreds of thousands of dollars spent while creating jobs, we would probably see it as foolishly wasting the opportunity. Why wouldn't any business owner, large or small, want to use any means available to grow and prosper?
It is similar to each of us claiming every possible deduction as we prepare our own returns. We are legally entitled to do so.
Sidney was one of the first communities in the state to understand that funding economic development was a good thing. Locally, we have voter-approved programs to do just that. In 1988, and again in 2007, the voters said yes, they wanted a strong community and economic development plan and were willing to pay for it.
Meanwhile, the state of Nebraska wanted to do what it could to offer incentives to business to relocate to our state or to expand and create jobs. So, the Employment and Investment Growth Act, LB775, was passed and the state decided that the best grease for the wheels was city sales tax dollars.
LB 775 seemed harmless enough. If an employer spent money on goods and services that resulted in the creation of jobs, then it could qualify to ask for the sales tax on those goods and services to be refunded.
If the city had been aware of the magnitude of some purchases that would be made and the sale 'tax returns' that would be claimed, we could have prepared. Instead, LB775 gave qualifying companies several years to ask for the returns, and sometimes a company might delay in asking for the returns until it best suited its own needs. Again, as individual tax payers, we often do the same thing, deciding on certain purchases or making certain decisions based on the tax repercussions.
It's all well and good when the companies creating the jobs are small and the city budgets are large, but when the companies are large and the city budgets are small, the flaw in LB775 become apparent. It is not that job creation or expansion is bad, but the rules of the game aren't fair.
So, we should do whatever possible to change the rules.
Then it can be a happy tax day.
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