Cottonport may seek 1-cent sales tax

Cottonport voters will be asked to approve a 1-cent municipal sales tax in the April election, the Town Council decided at its Dec. 18 meeting.

Mayor Scotty Scott said the tax , which would double the amount of sales tax received by the town, is needed to balance Cottonport’s budget.

The council voted 4-0 to put the tax proposition on the April ballot. Alderwoman Margaret Prater was absent.

“We are currently collecting one cent of sales tax to operate Cottonport,” Scott said. “That amount is barely keeping our heads above water when it comes to the budget. If nothing is done to bring in more revenue, the budget surplus will dry up.”

Scott said the current 1-percent sales tax generates about $136,000 a year. Doubling the municipal sales tax to two cents would give the town another $136,000 to pay for essential services.

With state, parish and town sales taxes, Cottonport has a 9.5 cent sales tax rate. The additional tax would raise that rate to 10.5 cents per dollar.

“I have gone around and talked to the merchants, explaining the situation,” Scott continued. “So far, all seem to be on board with the proposal.”

Councilman Luke Welch said the Town Council needs the help of the merchants to get the sales tax proposal passed.

Scott said putting the proposition on the April 28 ballot will save the town money in election costs because there are already state elections on that date. If Cottonport has to pay the costs for the sales tax election, he said he would recommend pushing the election date to the fall, when federal elections will be held.

AUDIT REPORT

In the annual audit report, town auditor Joan Ducote agreed that Cottonport must raise more revenue.

“The passing of the sales tax proposal would give Cottonport more breathing room,” Ducote said.

She noted that while the town had “a really good audit,” increased costs saw Cottonport’s General Fund finish $69,406 lower than the fund balance for the end of the previous budget year. Before transfers from the Enterprise Fund, the budget showed a decrease of $161,063 for all accounts.

Ducote said the Enterprise Fund -- the water and sewer accounts -- had $199,778 profit. Revenues totaled $882,281 while expenses were $682,503. That profit allowed the town to cover shortfalls in other accounts.

“It wasn’t quite enough to offset the government accounts, so that is why you see a drop in the ending fund balance,” Ducote told the council. “It also shows why the passage of the sales tax is needed.”

Ducote said Cottonport will have a tight budget in the coming year.

“The town is projecting excess expenditures in the General Fund of $338,931 for the fiscal year ending June 30, before transfers in/out and from/to other funds.

“After transfers totaling a net of $335,000, the General Fund is projecting an excess of expenditures of $3,931,” Ducote wrote in her report.

“The Enterprise Fund is projecting a net operating income of $313,696, before any transfers in/out to the General Fund and debt payments in revenue bonds. After transfers, the Enterprise Fund is projecting a surplus of $38,696.”

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