After the Pulaski County Council narrowly rejected a tax restructuring plan Monday, Council President Jay Sullivan hopes to get to work on a new proposal relatively soon. He told the rest of the Community Development Commission Tuesday that he doesn’t expect the council to wait an entire year before taking action.
While it’s too late for council members to make tax adjustments that would impact the 2020 budget, CDC Executive Director Nathan Origer noted that there are benefits to moving ahead quickly. “If they take action before the end of the year, collections on that new income tax would begin July 1, and distributions would begin in 2021,” Origer explained.
Sullivan said council members are looking at various property tax options, rather than increasing income taxes, which are currently the highest in the state. The ordinance voted down Monday would have resulted in a slight decrease in the county’s local income tax rate, while allowing property taxes to increase on non-homestead property.
But a provision that would have raised the “levy freeze” portion of the local income tax – even though the overall rate would have gone down – was an area of concern. It was noted that there are other methods that would achieve similar results.
According to Origer’s rough estimates, Pulaski County will use up about $1.7 million in its cash reserves this year, but he expects that deficit to decrease to about $410,000 in 2020. He said about $900,000 was cut from this year’s budget to next year’s, depending upon which funds are taken into account.
