Mayor Clark Hill asked members of the Commerce City Council to “keep your fingers crossed” as the city continues negotiations with Jackson County and its other eight municipalities about how the next 10 years of revenue from the local option sales tax (LOST) will be split.
The county government submitted its proposal and the cities have made a counteroffer. The group was due to meet today (Wednesday) for further discussions.
The problem for Commerce is that it stands to see its share diminished, since the major criteria for the split has been population and other parts of the county grew more over the past decade.
“We’re going to take a big hit, that’s a given,” Hill told the city council during an “emergency” council meeting Saturday morning. “The question is, how big a hit?”
The current fiscal budget projects LOST revenue to drop by $130,000, but a worst-case scenario is a reduction of $340,000, Hill said.
The county, using population figures, seeks 63 percent of the revenue. The municipal governments want the county to get 53 percent. They base their argument on services they provide to county residents and upon “daytime population,” which includes people who work in the municipalities.
State law requires governments to recalculate the formulas following each census. Following the 2000 Census, Commerce received a 13.6-percent share of the revenue, a figure that would drop to 10.3 percent, Hill said, under the county’s proposal. The tax brings in $1.125 million a year to the city at present.
A three-percent drop would, in the words of Hill, “be catastrophic for us. It would affect service delivery.”
The mayor pointed out that the city’s library serves a high number of Jackson County residents and that 30 to 40 percent of participants in its recreation programs are from Jackson County.
“Our position is the population cannot be the only thing you look at,” Hill said. The city’s water and natural gas systems also extend well beyond the city limits.
He also reminded the council that other cities’ General Fund expenses have not grown proportionately to that of Commerce.
Hill told the council that the negotiations, to this point, have been cordial.
“There is not a lot of divisiveness,” he said. “There is no hint that anybody wants anything bad to happen to any of the cities or the county.”
Should the local governments be unable to reach an agreement, the matter would go to arbitration. Should that not satisfy all parties, it would go to Superior Court, where the judge, by law, would render a finding for one or the other parties — an all-or-nothing solution with no further compromise allowed.
