They’ve paid for everything from color copiers to office supplies and computer software to staff training.

 


They’ve paid for everything from color copiers to office supplies and computer software to staff training.
   They’re called tax maintenance funds, and every county collector in Missouri is allowed by law to have one.
   But the accounts can grow until tens of thousands of dollars have accumulated, and that has raised the ire of some Northeast Missouri county commissioners, who are struggling to meet budgets in tough times.
   While no allegations of misuse have been made, several commissioners said that changes are needed to allow better scrutiny and more control over how the money is spent.
   Collectors say the system is working fine and that they’re handling the money responsibly. They also say they’re saving counties big-time cash by using tax maintenance dollars instead of general revenue funding for needed purchases.
   The issue erupted earlier this month in Pike County, when commissioners found that Collector Marty Morrison had more than $102,000 in her tax maintenance fund.
   “The way the economy is, I don¹t think holding back what you can in that slush fund is doing the county any good,” said Pike County Presiding Commissioner Dan Miller. “We¹re supposed to be the guardians of tax dollars. With these slush funds, it ties our hands.”
   “I am using that money for the benefit of the county if I’m purchasing (items) that would have had to come out of the general revenue fund,” Morrison said. “I have to watch out for the operation of my office. If I couldn’t collect taxes, there would be no money for the general revenue fund.”

The law
   State legislators set up the system several years ago.
   The main duty of collectors is to accept payments for real estate, personal property, railroad and utility taxes. They also sell business licenses and perform other functions.
   The money for the tax maintenance funds comes from fees that are charged to people who are late paying their taxes.
   As the economy worsened, accounts in some counties have seen an increase in revenue.
   For example, the fund in Lincoln County started 2010 with about $72,000. Marion County’s fund had almost $65,000.
   For Ralls County, the figure was $29,222, for Monroe County it was $28,998, for Lewis County it was $16,473 and for Shelby County it was $14,623.
    The law allows collectors to charge up to seven percent of the delinquent tax bill. Two-sevenths of the money must be sent to county general funds and three-sevenths to county employees’ retirement accounts. The rest goes into the tax maintenance funds.
   Collectors are mandated to use the money “for the purpose of funding additional costs and expenses” in their offices.
   Allowed uses include staff training, buying or upgrading information technology, equipment or “other essential administrative expenses” collectors deem necessary.
   The money cannot be used for salaries, unless it’s for costs that “may include reimbursement to county general revenue” for employees who work extra hours and “any other expenses necessary.”
   Collectors have “the sole responsibility” for spending, but do not have to provide commissioners with an account of how they use the money.
   While the funds are subject to audit, collectors can let the money accumulate with interest from year to year until it reaches a ceiling, which varies by county.
   “They can hold back so much and then they have to turn the rest over to general revenue,” said Brent Karhoff, the collector in Knox County and the treasurer of the Missouri County Collectors Association. “As far as misuse, I don’t know of any.”
   A spokeswoman in the state auditor’s office said it’s recommended collectors have a plan for spending the money if the balance gets high.

Potential for abuse?
   Some commissioners say the system could easily be abused and that maintenance funds should be treated like any other line item in budgets.
   Most other county offices have funds for equipment or supplies, but the money usually comes strictly from the commission-controlled general fund.
   A few offices that take in fees have maintenance funds, but the accounts rarely mirror the amounts held by collectors.
   Ralls County Presiding Commissioner George Lane said collectors “should be accountable just like” other officials. “They don’t answer to nobody.”
   “It concerns me that they have the ability to have monies in their slush funds and not have to account for it in their budget figures,” added Lincoln County Presiding Commissioner Sean O¹Brien.
   Collectors object to commissioners calling the accounts “slush funds” and say they’re as accountable as other offices in area courthouses.
   Marion County Collector Lee Viorel has been in office for 11 years, and remembers a time before the maintenance funds when some of his colleagues elsewhere had to bring computers with them from home or do the work by hand because there wasn’t enough money for new equipment.
   “If we didn’t have this fund, it would hurt the county because (commissioners) would have to put out more money from the general revenue fund,” Viorel said.
   As far as accountability, Viorel says he turns in to commissioners vouchers for proposed expenditures from the tax maintenance fund, even though it’s not required.
   “I realize the county is hurting,” he said. “I buy all of my own equipment out of the tax maintenance fund. I don’t ask the county to do it.”
   Karhoff said collectors “understand the financial situation” counties are facing.
   “We try to help out,” he said. “I have heard some of the collectors around the state have tapped into their (tax maintenance) funds to help with budget shortfalls.”
   Like Viorel, Morrison has been in office for more than a decade, and sees a critical need for the tax maintenance funds.
   Morrison plans to buy new computers and accompanying software this year from her fund. Bids are being sought, and Morrison estimates the bill at $25,000 to $50,000. The computers haven’t been replaced since 2000, she said.
   Commissioners “make it sound like I’m hoarding the money, which I’m not doing at all,” Morrison said. “I try to do the best I can for the people of Pike County.”
   Miller agrees the funds are “probably used correctly,” but dislikes that commissioners don’t have a regulatory voice in how the money is spent.
   “When you get a tax maintenance fund of more than $100,000, I would say that’s not being fair with the taxpayers,” he said.
   Morrison said she has never overshot her budget and that she has consistently spent fewer general fund dollars than she’s been allotted each year.

Possible solution
   The fact that many collectors also sought separate general revenue fund money for office expenses was a particular source of anger for commissioners this year.
   They claim collectors should rely on tax maintenance funds, particularly at a time when area counties are facing a drop in revenues and some are cutting staff or not replacing retirees.
   Like Morrison, many collectors say they don’t use all of the general revenue funding they are allocated and that the only reason they make the requests is to ensure that they have a fallback in case they must use more of the tax maintenance money than expected.
   While he backs a change in the law, Miller has proposed an option.
   He favors creating special county emergency funds so that if collectors and other office holders run into unexpected costs and needed additional funding, commissioners could approve it.
   “It’s important we give the taxpayers their money’s worth.” Miller said.
   A fund of three percent to seven percent of a county’s total budget, separate from other contingency funding, would likely cover any situations that arise, he said.
   Lane, who serves on the executive committee of the County Commissioners Association of Missouri and has heard from colleagues who are upset about tax maintenance funds, said he “agrees 100 percent” that the system should be changed.
   While collectors are elected every four years, Lane said voters expect that the three elected commissioners in each county to oversee tax money and other funding.
   “There are a lot of statutes that limit our power,” Lane said. “In a way, that’s not good.”
   Morrison said the system isn’t broken, so a fix is not necessary. And she said that with the economy still far from recovery, now is the time for more cooperation than consternation among county officials.
   “If the fund is handled correctly and used for what it is meant for, it is a good thing,” she said. “It’s not causing a problem as far as my office is concerned.”
   Marion County Presiding Commissioner Lyndon Bode said he tends to agree.
   “I really haven’t thought about whether it’s something that needs to be done away with,” Bode said. “It’s working well in Marion County.”