City Council to clarify sales tax use

McCOOK, Nebraska -- City Manager Jeff Hancock intends to clarify the ballot language of the two individual McCook sales taxes during tonight's McCook City Council meeting at Memorial Auditorium. Hancock said in his City Manager Newsletter released Friday that he will attempt to put the explanation in writing and provide councilors with some options to assist in the funding of the city's much needed capital equipment.

Specifics pertaining to what items the city is permitted to use sales tax to fund have become a focus after the proposed 2012-13 city budget included the creation of a 6 percent tax on mobile telephone services and increasing the land-line telephone tax from 3 to 6 percent, while leaving $401,797 of sales tax revenues uncommitted. The tax increases were described as being proposed to finance $158,000 in capital outlay projects.

The city sales tax revenues also raised questions in June, prompting an announcement from City Attorney Nate Schneider that stated the city was not required to reduce the property tax levy, after a former councilman claimed the increasing sales tax revenues were exceeding what the city would receive at its maximum property tax levy. Schneider said in that announcement that "[Property tax] relief also comes in the form of the city not having to increase its levy due to the use of sales and use tax for certain capital expenditures."

Hancock said in the 2012-13 proposed budget introduction that a $389,787 increase in the General Fund was necessary to maintain existing personnel and includes needed funding to meet operating capital items that had been neglected in the past. The proposed budget also included a $205,906 increase in the budgeted ending fund from last year and and an approximate 5.2 percent increase in city employee wages from the prior year.

The 5.2 percent increase includes a 2.5 cost-of-living increase for all city employees, combined with merit and longevity increases. A previous figure that reported closer to 7 percent incorrectly calculated some longevity increases carried over from the prior budget as increases.

Several city departments in the 2010-11 budget, which was made public just four months before voters were asked to approve construction of the $5 million municipal facility, reflected coming in under the previous years budget by budgeting savings in capital outlay spending.