State Representative Douglas Gutwein visited Pulaski County this week to speak to the county commissioners and council during a joint session held Monday night regarding a revenue bill vetoed by Governor Mike Pence that could affect the county’s CAGIT moneys. Gutwein explained that a clerical error at the state level could force the county to pay taxpayers back millions of dollars that had been collected by the County Adjusted Gross Income Tax – money that had originally been collected to cover the cost of the jail – because the state claims that the county overcharged its taxpayers. The county still owes roughly $5 million on the jail facility.
County Attorney Kevin Tankersley explained that the county did everything by the books.
“I just want to be clear that when the initial letter came from the Department of Revenue, they were like, ‘You overtaxed your taxpayers $5 million.’ They were quite aggressive about it. The reality is that it was checked by an independent county agency to make sure that no money went anywhere it wasn’t supposed to go. This is money that we agreed to pay back when we built an over-$8 million jail. And we’ve been collecting that money and paying that as we’re supposed to,” said Tankersley.
Gutwein said that the refunding of those moneys is a worst-case scenario, however, and said legislators are working hard to fix the issue. A revenue bill that would have fixed the problem was vetoed by the governor because, according to Gutwein, Pence does not approve of “retroactive” conditions, which Gutwein said are necessary in this case due to the state mix-up regarding the CAGIT tax.
“We’re not dealing with rocket science here,” Gutwein said. “Somebody messed up down there and they’re not wanting to fess up. It was one paragraph, ‘Pulaski County, retroactive for 2007 or whatever it was, extended through 2021.’ Simple fix to a very simple problem.”
Fortunately, there are solutions to the problem. Gutwein explained that legislators may meet again on what he described as “technical day” at the statehouse – June 12 – to override the veto. Alternatively, he said the county can use their own funds to cover the cost of the jail until the legislative session resumes in January and the problem can be addressed. Auditor Shelia Garling explained that there should be enough money in the CEDIT fund to pay for the jail’s bond and use the CAGIT funds the county currently has to cover the operating expenses until January.
There is currently nothing that can be done about the situation, according to Gutwein. He said the county will have to wait and see what the state revenue officials come up with as a solution and work from there, but he will keep county officials up to date on the progress.