DayeTime: Marksville's 'missing penny'
For at least the next few months, items bought in Marksville will cost a little less. Residents of the “Broken Wheel City” will pay less for big-ticket items like cars, regardless of where the purchase is made.
Sales tax in the city has been lowered by a penny.
Marksville’s “missing penny” of sales tax may seem like good news, but it also poses a big problem.
City officials are scrambling to find close to $1 million of immediate cuts to offset the loss of revenue due to a 1-cent sales tax dropping off the books.
The sales tax expired at midnight on Jan. 1, 2019, but nobody noticed.
Yes, that means consumers paid 1-cent more in sales taxes than they should have paid for all of those Christmas presents purchased in Marksville.
City officials are waiting to learn for sure whether they have to reimburse any sales/use taxes they erroneously collected from the expired tax.
Of course, routine sales taxes would have to be covered under an “Oops” rule. The city could not be expected to refund every consumer a penny of sales tax for purchases made in Marksville stores over the past year.
If there were any very large sales tax payments, such as from new construction projects and equipment purchases, an order to reimburse the taxpayer could really sting.
The city will put a 1-cent sales tax on the May 9 ballot.
I’m not a particularly positive person, especially when it comes to tax propositions. In general, I find the credo, “Cheer up, the worst is yet to come,” fits most scenarios.
In Marksville’s case, the “worst yet to come” would be voter rejection of the “restoration” of the long-time sales tax.
While new taxes are fairly rare in Avoyelles Parish, renewals fare much better.
The Police Jury dodged a bullet on the ballot when the state incorrectly printed the solid waste tax as a 1-cent sales tax renewal and a separate 8-mill property tax in December 2018.
The intent was to have one proposition with both the sales tax and property tax in an “all or nothing” gamble.
Does anyone really doubt how that would’ve turned out?
Had a state clerk not made that mistake, parish residents would be paying a private garbage company to pick up their trash.
Marksville will no doubt present the May 9 sales tax as a “renewal.” That is not “wrong,” but it also isn’t completely “correct.”
Fact is the old tax is dead. That means anything that comes after it is a new tax.
If the tax is approved, it will begin being collected on July 1, which is the start of the city’s 2020-21 budget year.
While talking about facts, it must be emphasized that the City of Marksville desperately needs that 1-cent sales tax to fund its streets, sewer and water operations.
I suppose the city could significantly increase water and sewer rates, but nobody really wants that to happen.
Marksville’s misfortune has probably sent municipal and parish bookkeepers to the account records for two reasons.
First to ask the question, “When does that sales tax expire?”
Second is to note, “There’s 1-cent in local sales tax available under the state limit.”
Of course, there are still a few municipalities with local sales taxes that would not be affected by Marksville's misfortune, and those would effect any parishwide effort that would push the local sales tax rate above the state-allowed minimum. However, it does make a parishwide sales tax effort more appealing to have the largest municipality's tax rate reduced.
Maybe the School Board and Police Jury will let Marksville have first crack at regaining its sales tax in May. If voters turn thumbs down on the idea this spring, all bets are off and the race is on to see who tries to claim that penny of sales tax for their economic purposes.
Marksville voters might be wise to note the Police Jury would love, love, love an opportunity to ask voters for a 1-cent parishwide sales tax to fund parishwide civil works projects and additional funds to ensure it can continue to provide parishwide garbage service.
The School Board also covets another chance to gain approval of a 1-cent sales tax to upgrade school district employees’ salaries.
Remember, a blind hog sometimes finds an acorn -- and given enough chances, even the most anti-tax parish will eventually approve a new tax.