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City trims SPLOST list for November referendum
Online shopping blamed for ongoing sales tax shortfalls
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City staff members recently trimmed more than $8.5 million from Statesboro’s project list for a six-year SPLOST continuation, as negotiations with the county continue and since the current sales tax has  never quite lived up to revenue projections.

 “We will need to take action on the 17th … ,”  Statesboro City Manager Randy Wetmore told the mayor and council June 27. “We need to get our information to the county so they can adopt it the first part of August and get (the referendum) on the November ballot.”

An update on SPLOST planning on was one of the purposes of the called meeting that night. With this Tuesday’s regular meeting cancelled because of its proximity to the Fourth of July, City Council’s next regular meeting will be July 17.

The council will actually be asked to approve the broad categories of spending with their totals, not the specific projects, Wetmore said. But the project list is used to figure the totals.

Not to be confused with the new Transportation Special Purpose Local Option Sales Tax, or T-SPLOST, approved by a majority of Bulloch County voters in May, the subject now is the existing, multipurpose SPLOST. It won’t expire until the end of 2019, but the county commissioners are trying to work out an agreement with the four towns on how to allocate the money in time to put a SPLOST renewal question on this year’s Nov. 6 ballot.

The total revenue projection for the six-year run is $62 million. Proposed shares, based on 2010 population figures, are 54.6 percent for the county government, 42.3 percent for Statesboro, 2 percent for Brooklet, 0.9 percent for Portal and 0.2 percent for Register.

But these would come after several joint projects, proposed as serving the entire county, are funded off the top. Those include options for an expansion of the jail with cost estimates that vary from $7.2 million to $19.2 million, capital expenses totaling about $11.7 million for landfill use and an expansion of the solid-waste transfer station, and up to $8 million for upgrading the two-way radio system for public safety agencies.

With the most “optimistic,” or low, estimate of the joint-project costs, the city could expect to receive $15,185,700 for Statesboro-specific projects, Wetmore said.  That would also be if revenue to all the local governments reached the full $62 million.

 

SPLOST shortfall

But the current run of SPLOST, approved by voters about five years ago, has not met its projections, he cautioned.

“The present 2013 SPLOST is coming in at around 80 (percent) to 85 percent of what was estimated when the last SPLOST was passed,” Wetmore noted in a memo to the mayor and council. “With this recent history, it is prudent to consider what SPLOST funding would be available if it came in at 90 percent or 85 percent.”

T-SPLOST, the sales tax for transportation talking effect Oct. 1, has figured in the planning for renewal of this older 1 percent SPLOST. The city’s list originally included $6,780,000 for street, sidewalk, drainage and traffic control projects now removed from consideration for SPLOST because they can be funded with T-SPLOST instead.

 

City’s reductions

But beyond that, Statesboro’s revised June 12 SPLOST list indicated $8.77 million in eliminated projects and reduced cost estimates. The more than $22.8 million originally listed was reduced to a revised total of less than $14.1 million.

The parks, greenspace and trails category was cut most, from $3.5 million down to $500,000, with the elimination of a $2.5 million amphitheater and $500,000 for trails.

A category for city-only solid waste disposal equipment was slashed from $1,080,000 down to $250,000 with the subtraction of two garbage trucks and a knuckle-boom loader, leaving only a frontend loader for the transfer station.

SPLOST revenue to some extent subsidizes both the city’s general fund, which also receives the property tax and some fees, and utility departments, such as water and sewer and natural gas, for which users are billed.

“Some of these things that  we’re taking out we may end up coming back to you later, in two or three years and say we  need a rate increase to be able to cover what’s not in there because now we have to replace it,” Wetmore told the council.

Under public safety, SPLOST funding requested for Statesboro Police Department projects was cut from $4.1 million to $2.2 million. Within that, the biggest reduction was in proposed police vehicle purchases, from $3.6 million down to $1.75 million.

Similarly, $2.25 million originally listed to buy three replacement fire engines for the Statesboro Fire Department has been reduced to $1.5 million to buy two fire engines.

“On the other hand, if something good were to happen and all of a sudden we had more sales tax coming in we’d be in a better spot, but rather than planning on something we don’t know to happen, Tom and I have been conservative,” Wetmore  said, referring to Bulloch County Manager Tom Couch.

 

Online shopping

Officials suspect that the growth of online shopping has been one cause of local sales tax revenues not meeting projections.

“Back when that SPLOST started in 2013, nobody knew that Amazon was going to be the gorilla that it is,” Wetmore commented during last week’s meeting.

“That is one thing that I’m very concerned about is online sales and how it’s going to affect us,” said Mayor Jonathan McCollar.

Councilman Phil Boyum noted that the Georgia General Assembly passed a law last session to collect sales taxes from out-of-state retailers for online purchases delivered to Georgia residents. Signed by Gov. Nathan Deal on May 3, the law takes effect Jan. 1, 2019, and applies to retailers that make at least 200 sales or sales grossing $250,000 or more in Georgia each year.

Meanwhile, the U.S. Supreme Court, in a 5-4 decision in June, ruled that states can collect sales taxes from online retailers in other states.

But right now Georgia’s state officials aren’t sure how much revenue can be captured and returned to local governments, Wetmore said.

“So I wouldn’t bank on their estimate,” he told the mayor and council. “I can’t see us adding in revenue when we don’t know.”

Herald reporter Al Hackle may be reached at (912) 489-9458.

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