A state error that was announced earlier in the month could provide funds coming back to the City of Knox. Clerk-Treasurer Jeff Houston said last week that a revelation in December found that the state didn’t account for some $320 million in corporate taxes. That triggered an internal audit that resulted in a discovery of a needed distribution to cities, towns and counties of $206 million.
Houston estimated the city could be getting back almost $46,000 in Edit and CAGIT (County Adjusted Gross Income Tax) funds. When the money comes back to the city, it must be placed somewhere. Houston explained where it will be going.
“Umbaugh [and Associates] suggests that we deposit this money into the Rainy Day fund instead of any fund that’s property tax supported. This is because we don’t want it to affect our maximum levy or our tax rate. Also, if they make a mistake I think it would be easier to pay back out of that Rainy Day fund. Hey, we don’t know if this money is just illusionary or not,” Houston said.
Houston said money could be spent out of the Rainy Day fund.
“Now we can spend money out of that Rainy Day fund, just like we can now. We can do this by way of either an appropriation during the regular budgeting process, or we can do an additional appropriation out of the Rainy Day fund.”
Houston said yesterday that money will come in two installments, but nothing has been received so far.