Hall County Administrator Charley Nix recommended Wednesday that the county temporarily suspend retirement contributions for employees to combat low sales tax revenue.
Hall County makes contributions to employees’ 401(a) and 457 programs. The county matches a percentage of the money employees choose to put into their 457 account, while the county contributes 4 percent of employees’ salary to the 401(a) account.
Nix said during the Board of Commissioners’ work session that he had hoped to avoid further pay cuts this fiscal year but thinks more may be necessary as sales tax collections remain low. He said trimming retirement contributions is a measure that will save the county around $2.2 million this year without impacting employees’ "take-home pay."
County employees currently take one furlough day each month and will not receive merit increases this year in response to the economic climate.
"I’ve tried to take the approach during all of this minimizing of taking slices at a time, rather than taking a chain saw six months from now," Nix said. "It is just when you see the trends you have to make the decision early to get the cumulative effect down the road."
Finance Director Michaela Thompson said accounting changes at the state level have made predicting future sales tax collections a headache.
The county traditionally received its sales tax checks from the Department of Revenue two months in arrear, but the Department of Revenue recently switched to sending checks one month in arrear.
"Regardless of that we are continuing to see our (Local Option Sales Tax) not go up in the way that we thought it would go up, so we figure that we’ll probably be able to rebound from that but we don’t know the when, so our biggest concern about doing this is just to protect ourselves," Thompson said.
The county is currently collecting between $1.4 million and $1.6 million in Local Option Sales Taxes each month. Normal collections would be $1.8 million to $2 million per month.
Thompson said since 2003, sales tax collections increased each year until now.
"We are collecting now on a 2005 level, 2004 level," Thompson said. "This trend is very unusual. Not only did it not grow but it lost, it fell short of the last three years’ actual collections."
The commission will discuss the matter and vote at its board meeting Thursday at 5 p.m. in the Courthouse Annex.