Marksville cashes in CDs to cover revenue loss

The pain from losing a 1-cent sales tax will be eased somewhat by the cashing in of two certificates of deposit, the Marksville City Council decided at its March 11 meeting.

The council voted to cash in a $70,000 CD established in 2010 and a $65,000 CD from 1999 and deposit the $135,000 in a “money market-plus” account.

The vote was 5-0 with Councilwoman Mary Sampson abstaining because she is an employee of a bank where one of the CDs is deposited.

The move will allow the city to continue drawing some interest on its money but also allow access to the funds if needed to offset costs that would have been covered by the 1-cent general purpose sales tax that is unable to be collected.

The tax expired at the end of 2018. Nobody realized the tax was expiring and due for renewal or that the tax had expired, so it was collected for all of 2019.

In early January the error was realized and the city was barred from receiving and spending the tax funds.

Any of the 1-cent city sales tax collected this year is being put into escrow until it is determined whether it can still be given to the city.

That might depend on whether voters approve reinstating the penny tax.

Due to the coronavirus threat, the city will have to wait over two months longer for that decision because the May 9 election has been postponed to July 25.

The City Council has tried to make up the lost revenues with layoffs, spending cuts and other actions.

Since the sales tax snafu surfaced, there have been several comments from upset residents complaining that they spent hundreds of dollars more for such large items as new cars and equipment since the tax legally expired.

Some have asked that the city somehow refund all sales tax “illegally collected” over the past year, but that is not realistically feasible.

Mayor John Lemoine has said he is optimistic the sales tax will be reinstated by voters.

He said city residents would benefit from the sales tax because it funds necessary public services and a large portion of the sales tax revenues come from out-of-town shoppers paying the city sales tax.